Home / Capital & Crypto / Burned Crypto Investor Claims Bittrex Keeping $100K in BCH/BSV Mix-Up

Burned Crypto Investor Claims Bittrex Keeping $100K in BCH/BSV Mix-Up

Last Updated March 4, 2021 2:36 PM
P. H. Madore
Last Updated March 4, 2021 2:36 PM

By CCN.com: Imagine you sent $100,000 worth of Bitcoin Cash (BCH) somewhere. Then you opened up Bitcoin SV (BSV) and accidentally sent another $100,000 SV to that same address. Then you find it is locked up. That’s alright. You know the holder – an exchange. Surely an exchange won’t just hijack that amount of funds?

All of the above is very close to what happened, according to a source writing to CCN.com and elsewhere. The exchange in question is not a Russian backwater operation or something you’ve never heard of – it is Bittrex.

A $100,000 Crypto Mistake

Here’s what the user says  happened:

“Just lost 100k with Bittrex sending BCH together with BSV. Somehow half of BCH been transferred together with BSV. Bittrex doesn’t want to return my funds. They have private keys and can do, but say that will not do. Does anyone have contacts of higher managers or their financial support to fix this issue directly? All I get is typical replies like from a robot. It is ok if it were 100 USD but this was 100K on Bittrex account which they don’t want to return.”

To CCN.com, he wrote:

“I’ve been messaging to support regarding this for many days and no one tried to help me. Created many support tickets. They all just replying like robots and that will not refund any cent. I believe that someone of workers can even steal that money after some time without notifying their chiefs. This amount is very big for me and my family.”

No good seems to have come of the situation yet.

The Bitcoins Speak the Same Language, but They’re Not Talking to Each Other

For those that don’t understand, here’s how it works — every “fork” of Bitcoin shares a block history, and thus addresses, with each other.

Bitcoin SV forked away from Bitcoin Cash and included the addressing scheme used in Bitcoin Cash. On both, you can still use the traditional Bitcoin addresses that begin with 1. If you broadcast such a transaction  on Bitcoin SV, for example, it doesn’t broadcast on Bitcoin Cash or Bitcoin.

But you can have the same address across all three chains if you never moved money between the forks. Whatever amount of Bitcoin you had, you had it in Bitcoin Cash and the same with Bitcoin SV.

bitcoin fork
Every fork of Bitcoin shares a block history. | Source: Shutterstock

Through some mix-up, Bittrex has essentially seized $100,000 from the user without a valid explanation.

As we said before, Bittrex is not Sistemkoin or some out of the way exchange. It’s a relatively old name in the space with a decent reputation, despite its problems acquiring a BitLicense. Therefore the lack of attention to the issue and the apparent theft of funds is quite shocking. According to our source, weeks have passed with no movement on the subject.

It’s relatively unclear how the crypto mix-up took place. The user says he sent funds from both wallets to the same address, a Bitcoin Cash address. Bittrex controls the private key to the address, so they should be able to access the funds on Bitcoin SV.

Some people were not sympathetic. One Redditor wrote :

“Well you made a mistake in sending to the wrong address, you are pretty much at their mercy from here. How long has it been since you first contacted support? I don’t think higher ups will really care much, they would just tell you to open a ticket. I’m not sure you would have legal resources since you sent the BCH and should have known the addresses are not the same, but maybe speak with a lawyer and see their opinion.”

The episode is a lesson in extreme caution when sending and receiving crypto.

The problems described are precisely the kind being tackled by the FIO Protocol, which will enable the generation of invoices for any crypto supported by a given wallet.