Crypto exchange HitBTC is under fire for allegedly blocking fund transfers days before the massive January 3 withdrawal during the Proof of Keys event.
Many HitBTC customers are taking it online to warn others to stay away from the popular cryptocurrency exchange.
This was after the trading site seemingly froze their accounts without warning.
Posts across many social media platforms surfaced recently this week, claiming that HitBTC has prevented its users from withdrawing their stored cryptos from the exchange. Even verified accounts, said some users, were being restricted by HitBTC.
Im worried that Im being scammed out of my coins. I have been trying to withdraw coins to a whitelisted address in my account and its not working… what's going on? can you help?
— Alex Summers (@Alexandiver) January 2, 2019
@hitbtc hey I cant withdraw my money, what is going on?
— Damian Maisonave (@damimaisonave) December 28, 2018
A HitBTC user, on the exchange’s subreddit, posted on January 1:
“The block occurred over 10 days ago. Communication has ceased for several days now… Hopefully, others will have better luck getting out their funds before Jan 3 when the insolvency will be exposed.”
Customers accused HitBTC of hiding its insolvency from its users by freezing their crypto accounts. These suspicions were fuelled further by the timing of the restrictions—only a couple of weeks before the scheduled Proof of Keys even on January 3.
Similar to a bank run, the Proof of Keys event invites digital token holders to withdraw their virtual funds from third-party crypto services like exchanges to their individual wallets. The goal is to prove exchanges’ claims that they store every deposited crypto.
Many expect this simple exercise to weed out exchanges that are insolvent—or at least those that do not have enough assets on hand to support all crypto withdrawals at once. With HitBTC’s timely blocking of accounts, it seemed to many token holders that this exchange is one of the erring platforms the Proof of Keys event wants to remove from the crypto space.