“HitBTC is Fraudulent”
“HitBTC Withdrawal Blocked”
“HITBTC restricting my account. Account
has passed KYC and granted VERIFIED status”
“All Funds Suddenly Locked a Couple of Weeks ago, going nowhere with support”
“Why can’t I get in touch with customer service?”
All of these comments can be found among a slew of similar complaints on the HitBTC Reddit page.
These complaints against the cryptocurrency exchange started more than a week ago when customers started to raise questions on the exchange’s action of freezing their accounts.
In most cases, customers complain that after completing their know your customer (KYC) procedures, submitting all documents and answering all questions by the HitBTC team in order to withdraw their funds, their accounts were frozen. They also allege that the exchange’s customer support team simply stopped responding to them.
While one of HitBTC’s representatives, Paola Balzano, responded to some of these complaints and promised to take immediate action, a few of the disgruntled customers such as the Reddit handle Internsix still state that they are getting no response from the exchange on how can they withdraw their funds.
But with the story now being something that is becoming much more public, it seems that HitBTC representatives have started to respond through official channels as well.
On one of the complaint threads, Balzano assured the customer that they would have now received a response from the “security team” at HitBTC. A confirmation from the customer’s end on whether or not that happened is still pending.
Balzano also issued the following statement on another Reddit post:
“Security precautions taken by HitBTC in the AML/KYC process are designed to prevent international money laundering and fraudulent schemes, which is a common practice for a finance institution. Most traders have absolutely no trouble passing the KYC once they are able to provide us with the requested documents. Thank you for your inquiry.”
But people aren’t buying this story. They think that something else is afoot and they just might be right. It may have something to do with the movement of Proof of Keys.
The issue is allegedly staged to handle the upcoming Proof of Keys event
The Proof of Keys event is an annual practice proposed by cryptocurrency expert Trace Mayer.
It encourages customers from all cryptocurrency exchanges to withdraw their funds from their crypto exchange wallets on January 3 each year.
This is to check if the exchanges do have their funds saved with them and if they are available for withdrawal all at once. The thought behind this experiment is to verify if exchanges are using customers’ funds without their consent or simply keeping them safe for withdrawal as intended.
The event is celebrated through the cryptocurrency community and provides the exchanges the credibility once they have passed the test by those customers who participate in it.
With the event looming over the exchanges’ heads, the timing for HitBTC’s apparent verification problem couldn’t be worse; since it seems as though the exchange is blocking withdrawals ahead of the event by freezing its customers’ accounts.
Mayer himself noticed the issue and tweeted to bring attention to it, after which it gained even more traction.
The current issue only adds to the exchange’s woes. It remains to be seen whether or not the affected customers get a logical response from HitBTC on their frozen accounts’ status before January 3.
It really doesn’t look good for HitBTC but we’ll see what happens in the following days.