HitBTC Freezes Its Customers’ Accounts

January 02, 2019 | AtoZ MarketsAccording to the several news platforms, HitBTC the cryptocurrency exchange platform with an unknown location launched in 2014 and operated by Hit Techs Limited, froze the accounts of its customers , supposedly in anticipation of the annual Proof of Key event.

How It All Started?

On the New Year’s Eve, on December 31, HitBTC responded to a complaint published on Reddit the social news aggregation and discussion website. User with the nickname PEDXS accused the company of suspending his withdrawal requests. He explained that he dutifully passed the “know your customer” test and waited six months to get access to his HitBTC trading account. PEDXS confirmed that, although he had already withdrawn most of his money, he still left some of them in his public address for trading. Earlier, about 5 months ago, PEDXS, according to him, contacted an experienced lawyer. The legal attorney explained that, the case against HitBTC “would be very expensive” because, in addition to filing a lawsuit in the United States, he would have to do it also in Europe and Asia. Another problem PEDXS mentioned, that HitBTC is a very elusive company, and it’s not even clear where their physical office is or where their company is even registered. For this reason, as the Reddit user explained he asked other users who faced a similar problem with HitBTC to contact him. “I will make a list that I give to a lawyer when we reach a critical mass”, added PEDXS in his address. A large number of people with the similar problem responded to the aforementioned post. The appeal itself has collected over 2 thousand views, which according to PEDXS created  a “social media pressure“ which “worked”. “After several months of sending over 40 emails, HitBTC finally unfroze my account,” explained PEDXS. “I immediately removed most of my funds, but left a small amount for day trading. I did this because HitBTC promised that “further automated restrictions will not apply.”

There Are More Unsatisfied HitBTC Users

As we mentioned before PEDXS was not the only one HitBTC user, whose requests were not fulfilled. Another Reddit user, under the nick name LOOKATMYIQ, confirmed that he also faced the same issue while using HitBTC. According to him, he “presented all his documents / certificates for KYC a few days ago.” A user LOOKATMYIQ wondered if the company had cheated on him. He mentioned that he has been trading cryptos on different exchanges for years and never one of them has blocked his funds without warning, as HitBTC did. LOOKATMYIQ added that “the customer service quickly responded“ to his requests for additional information, but since he gave them everything they asked, “they just disappeared” According to some news sources, the Redditor, who pretended to be a representative of HitBTC, collected the user’s accusations and took care of the immediate response to the complaints.

Is It all Because of the “Proof of Key” Event?

PEDXS, according to him, doubts that “HitBTC intentionally blocks user accounts, fearing a massive seizure of coins as part of the annual Proof of Keys event.” Proof of Keys is a movement started by the famous Bitcoin investor Trace Meyer, which occurs every year on January 3. Each year, a community of Bitcoin holders called HODLers of Last Resort participate in the celebration of “Key Proof”, demanding and taking possession of all Bitcoins owned by trusted third parties on their behalf. HODLers call this event a test of trust because they check people, exchanges, corporations and other services. According to Meyer, it is very easy to forget location of a small amount of bitcoins the user purchased. The Proof of Key event helps to remember its location. Most importantly, as the investor stated, HODLers can test themselves. Meyer encourages crypto traders to withdraw funds placed by third-party services, checking them for solvency and reliability. Movement is a way to find out if crypto exchanges store funds that have been deposited in their private wallets in the past. HODLers everywhere bring all their bitcoins to wallets they control, which according to movement enthusiasts provides consensus on the network. For this, the community uses the best in their opinion “practices such as the Glacier Protocol.” Anyone who wants to support an annual event adds [Jan / 3➞₿?23] to their Twitter account. According to Meyer “demanding ownership of their assets, people will quickly learn using the blockchain, regardless of whether they are part of elite HODLers or not.”

Traders Are Encouraged to Boycott Unreliable Exchange

 “Within a few months, starting from the day of the auction, I restored the balance of the BTC ” PEDXS explained in his another Reddit post. “When the confirmation of the key date appeared, I felt that HitBTC was the main insolvency suspect, so I tried to withdraw my BTC.” As the user added, the exchange “blocked the withdrawal and froze my account again”. John McAfee a British-American programmer and businessman who founded the software development company McAfee encouraged people to boycott HitBTC in early 2018 in his Twitter account. “Cryptocurrencies have become what we initially struggled with. Their power is enormous. For example, According to the several news platforms, HitBTC the cryptocurrency exchange from an unknown location launched in 2014 and operated by Hit Techs Limited, froze the accounts of its customers in anticipation of the annual key confirmation event. has increased the suffering of millions of poor people who cannot afford the minimum contribution because it exceeds their monthly income,” McAfee stated in his Twitter post.

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