Shell-Shocked HitBTC Users Shout ‘Fraud’ in Response to Severe KYC

May 17, 2019 22:00 UTC

By CCN: HitBTC users are being asked to provide excessive detail about the derivation of their funds, according to multiple sources. Even Bitcoin developer Luke-Jr was forced to undergo KYC in order to withdraw funds. The famous small-blocker reportedly had chosen the exchange for its perceived lack of know-your-customer compliance.

High-Profile Users Get Their Issues Resolved

HitBTC, Would You Like A Blood Sample Too?

One user reports that HitBTC has frozen around $12,000 with the following message, which came after he provided all the requested verification documents:

“The source of funds report has to describe all the actions you have performed with these funds before sending them to HitBTC, e.g. purchasing them, exchanging, transferring from one address to another. Kindly present the chain of such events in chronological order. Please attach screenshots, which will confirm each step.”

The unusual request for further information is viewed as a violation of the user’s privacy and an attempt to simply withhold the funds. Meanwhile, other users claim that their funds have been stopped with limited response from customer support, sometimes for weeks on end.

It’s unclear if these demands are even in compliance with the laws that exchanges must abide by or what laws HitBTC is purportedly trying to respect. Various professional services exist, such as Chainalsysis, which are meant to help companies verify the legitimacy of crypto funds.

Another Month, Another HitBTC Problem

Complaints against HitBTC seem to stack up and stack up. Here’s a gentle reminder that the crypto trading world has hundreds of exchanges.

The exchange recently found itself under our microscope for inappropriately handling a token swap during a bull rush. Having closed the market in question, HitBTC users who held MaxiMine tokens were effectively locked out of realizing their gains. HitBTC later promised to send the tokens back to MaxiMine so that it could fairly distribute the tokens. The effect on the traders remains, as the price eventually collapsed.

A Reddit user says of HitBTC:

“Here is their favorite tactic: they wait until you send a large amount of funds to your account (for example, more than 1 btc) and then suspend the withdrawal and start an exciting quest called “go f**k yourself”.”

As recently as today, the exchange promised that a resolution is coming for its storied affiliate program, which has been in “maintenance” for several months.

Hardly a month passes without some public complaint against HitBTC. In the words of Luke-Jr:

This article was edited by Gerelyn Terzo.

Last modified: May 17, 2019 21:42 UTC

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P. H. Madore has written for CCN since 2014. Please send breaking news tips or requests for investigation to bitillionaire+phm@gmail.com. He lives in Maine, USA. A single father of four young children, he does not discourage financial donations, provided they do not come with strings attached.