Cryptocurrency HitBTC has come under criticism of its users of it decided to freeze accounts ahead of an annual proof of keys event. Reports suggest the crypto company froze some accounts already on December 31st, while the proof of keys event is supposed to take place on January 3rd.
During a proof of keys event, an exchange needs to proof it actually has all the crypto currency it’s claiming to have. To do so, all users remove their funds on January 3rd. That way the exchange needs to proof it actually owns the funds invested by its clients.
Freezing accounts ahead of the community powered Proof of Keys event, suggests HitBTC doesn’t actually have the coins. When people would withdraw their coins from the exchange, it would basically go bankrupt. Freezing accounts temporarily can prevent this.
Despite HitBTC investing lots of time in offering more trading pairs, including ones for litecoin (LTC) and USD coin (USDC), the exchange has been under fire more than once. Last year tech investor John McAfee requested crypto investors to avoid HitBTC at all cost, while privacy coin Apollo refused to be listed on the exchange because of its fraudulent behavior.
HitBTC is not known for its great communication. The exchange just now started replying to tweets. It suggests that all withdrawals are in a queue, waiting to be processed. As a reason for the delay, the company mentioned ‘security reasons’.
The exchange is not a small one. HitBTC is currently the 12th biggest exchange in terms of trading volume. According to CoinMarketCap the exchange has a daily trading volume that exceeds 223 million dollars. HitBTC is also known for listing basically every coin that pays a fee. Currently it offers 769 markets, that’s the most of all exchanges in the crypto market. Even the Russia-based exchange YoBit, often associated with fraudulent businesses, has less markets on offer. Market leaders like Binance, OKex and Huobi offers somewhere around 400 markets.
Also published on Medium.