Cryptocurrency exchange HitBTC has been suffering a series of complaints from its users who claim that their accounts have been frozen ahead of the Proof of Keys event, which is scheduled to be held on January 3rd.
The annual Proof of Keys event is part of a movement started by Trace Mayer, a well-known bitcoin (BTC) investor and host of the Bitcoin Knowledge podcast. Those who participate in the event withdraw their cryptocurrency from centralized exchanges (or any other third-party service) every year on January 3rd. The purpose of withdrawing funds is to determine whether third-parties can be trusted with managing users’ assets.
On December 31st, 2018, a Reddit user named PEDXS wrote a complaint, noting that HitBTC was not allowing customers to withdraw their funds from its exchange. Redditor PEDXS claimed that he had submitted the documentation required to pass know-your-customer (KYC) checks and requirements. He also alleged that HitBTC had been holding his funds for 6 months.
HitBTC Allegedly Failing To Keep Its Promises
However, PEDXS noted that he had been able to withdraw most of his money from the controversial Denmark-based crypto trading platform. There is only a small amount of crypto left in the user’s account with HitBTC for day trading purposes. Commenting on the frustration he experienced when dealing with the exchange, PEDXS revealed:
After months of sending 40 plus emails, HitBTC finally unfroze my account. I immediately withdrew most of my funds but left a small amount to day trade. I did that because HITBTC promised that “No further automated restrictions will be applied.”
Confirming that he also experienced problems when trying to withdraw his funds from HitBTC, Reddit user LOOKATMYIQ wrote:
Submitted all my documents/evidence for KYC days ago and now support [is] going cold on me. Have I been scammed? I have been trading crypto for years on all kind of exchanges and never had my funds locked without warning like this. Support [was] fast to respond when asking for additional (over the top) information but since I have given them everything they have asked for they’ve just disappeared on me.
As an experienced cryptocurrency trader, PEDXS claims to have profited from his trading activities as he managed to “build back [his] balance … to a couple BTC.” But with the Proof of Keys event approaching, HitBTC allegedly “blocked” all the withdrawals he tried to make and reportedly froze his account again.
"Failing To Keep Up With Innovation & User Demands"
Harsh Agarwal, an online exchange reviewer, noted:
HitBTC was something that began as a promising crypto exchange and got lucky with the big crypto wave in 2016 and 2017, but it [definitely] failed to keep up with the innovation and user demands. They are barely surviving, and this can have a major impact on users who are using HitBTC as their crypto exchange.
Meanwhile, eccentric crypto enthusiast John McAfee has also been warning his followers regarding HitBTC’s questionable operations. McAfee tweeted (in July 2018):
The crypto exchanges have become the thing that we have originally fought against. Their power is immense. Hitbtc, for example, has increased suffering for millions of poor people who cannot afford the minimum buy-in since it is greater than their monthly income. Boycott them.
As CryptoGlobe reported in July 2018, several HitBTC users had claimed that the exchange was holding their funds without providing a reason as they had already submitted all required KYC documentation. The frustrated users had also accused the exchange of engaging in "selective scamming" as it was allegedly going after certain accounts.