HitBTC Blamed Of Freezing Accounts Ahead Of Proof Of Keys Event

Cryptocurrency exchange HitBTC has, according to multiple sources, frozen the accounts of its customers before the annual Proof of Keys event. On 31 December 2018, the company responded to an open complaint on Reddit after being accused by the user of suspending its request for withdrawal.

Redditor PEDXS wrote that he has successfully cleared the know-your-customer process after waiting six months to gain access to his HitBTC trading account. He also revealed that although he had already withdrawn a major portion of his money, he had left some of it in his public address for day trading.

In his complaint, PEDXS said “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.”

Another redditor, using the alias LOOKATMYIQ, confirmed that his withdrawal requests were also rejected by HitBTC. A notable portion of his complaint is as follows:

“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.”

A redditor posing as HitBTC representative took note of the charges and guaranteed immediate follow-ups. PEDXS doubted that HitBTC locks user accounts intentionally, fearing massive coin withdrawals at the annual proof of Keys event.

For those who do not know, Proof of Keys is a movement started by renowned Bitcoin investor Trace Mayer who asks crypto traders to withdraw their funds deposited with a third-party service every 3rd January. The aim of this is to hold all these services of third parties accountable by testing their solvency. The movement is a way of detecting whether crypto exchanges hold the funds in their private wallets in the past.

PEDXS pointed out “Over the months, from day trading I have built back my balance up to a couple BTC. With the proof of key date approaching, I felt that HITBTC is the prime suspect for being insolvent, so I tried withdrawing my BTC. Guess what, they blocked the withdrawal and froze my account again.”

Harsh Agrawal, a reviewer, wrote “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.”