Business

Erik Gibbs

HitBTC claps back at claims it is insolvent

The HitBTC cryptocurrency exchange has had a rough year. It has had to deal with a backlash after it froze accounts over fears of a mass exodus and was then accused by John McAfee and Bitcoin Private—on two different instances—of questionable activity, including fraud and blackmail. More recently, the exchange has come under fire for allegedly being out of money, a claim it vehemently tries to defend.

Social media has erupted recently with reports from netizens that the exchange is insolvent. Messages have been seen on Reddit, Twitter and other platforms, including one from Luke Dashjr on Twitter at the end of March that reads, “Looks like @hitbtc have decided to go full scammer, and are stealing balances of users (including me)…”

That post received a reply by Ami S, who stated, “They’ve been selectively scamming for at least 2 years now. I’ve read dozens of reports on Reddit from people that have lost quite a bit to them.  They also run [Changelly].”

There have also been numerous reports, as recently as this month, that the exchange is arbitrarily freezing accounts and preventing users from making withdrawals. Twitter user CryptoMedication asserted that the exchange is bust, stating in the first of several lengthy tweets, “1/ @hitbtc is insolvent. Surprised they’re still in operation. Here’s a thread showing how. That’s when I discovered that @hitbtc has liquidated down 720k bitcoins. They have about 350.0 (three hundred fifty) bitcoins remaining.”

HitBTC issued a blog post in order to respond to the criticisms, stating, “A widely quoted article, in its entirety, is based on only 2 AML cases. One of them was initiated as part of the investigation into the December, 2018 BTCP security breach, at the request of the coin’s core team. Unfortunately, there is no clear indication of the nature of the second case that can be discerned from the article. The author of the article failed to track the deposit/withdrawal dynamics that did not uncover any irregularities. A simple block explorer or our public System Monitor would suffice for these purposes”

The platform also attempted to address its decisions for adding or removing digital currencies from the exchange, explaining that there were sometimes errors in judgment due to the immaturity of the crypto ecosystem.

If HitBTC is solvent as it claims, it seems like the solution is simple—prove it. As CryptoMedication states, “Is there a reason why you’re unable to tell people us where your Bitcoin storage is at? If what I published is as untrue as you claim it is, then providing a wallet address where your Bitcoin funds are stored will go a long way in *proving that*.”

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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