Note: This article was from the outset published on Medium but was censored. If you have experienced similar censorship then consider using WeUseCoins by submitting a drag request with your content. Credit to Trace Mayer for suggesting I repost here and continuing to be a champion of our determination with Proof of Keys.
HitBTC’s response to this publication is Baghdad Bob worthy.
How HitBTC engages in selective scamming and appears to cling only a single digit percent of the cryptocurrency their order books suggest. An analysis of how HitBTC’s very arrange is deliberately designed for selective-scamming and what the blockchain firms and cryptocurrency users can do to remove this blemish from our diligence.
There are thousands of times more posts on Reddit, Twitter, and other social media platforms from ones with funds locked on HitBTC than all other exchanges combined. HitBTC alleges these locked funds are due to “AML”, but this is an unmistakeable lie. HitBTC demonstrates a single digit percent solvency.
HitBTC’s wallet addresses hold a single digit percent of the holdings they should compel ought to, based upon the liquidity presented on their own platform. These Tweets provide the TL;DR evidence of HitBTC’s insolvency being induspitable and very alarming.
HitBTC is panicking about this article as mass-exit and capitulation looms. With enough community effect, we can strike the death blow and not wait for an exit scam or intervention from authorities. If you reading this (yes, you!) shares this dissemination, you’ll most likely prevent someone from being victimized — and might even make 2020 be the year we correct the cancer that HitBTC is to our industry.
HitBTC presents themselves as an “innovative” exchange offering extensive (pass one over oning) claims regarding their security, solvency, and history. To those not doing deeper due intelligence, HitBTC would put in an appearance to be an exchange that offers competitive trading fees, easy registration (with no KYC requirement), listings of coins initiate in few or no other places, and high liquidity/trade volume — and while all of these will be dissected later, the core bring up to start is that it’s no wonder that a consequence of the 2017 bull market was an influx of individuals seeking to trade on rostra that (purportedly) demonstrate those attributes.
Late 2017 onward, the blockchain industry has had it’s public perception and poise consistently under assault by countless instances of fraud, including many large scale exit scams — some of which covered exchanges. By now, most are familiar with the QuadrigaCX fiasco — in which the alleged death of the exchange’s owner resulted in the startling loss of access to custodial assets. As an analyst, the QuadrigaCX situation presented two realities to me most may overlook:
1: Even if QuadrigaCX had not been destitute (which they were), exchanges will claim to be solvent and expect their unverified word on this to be sufficient.
2: Exchanges will claim to be secure, even lying about use of multisig .
Most even loosely involved in cryptocurrency, by now, bear the wherewithal to realize that involving themselves (or, specifically, their assets) with anonymous teams is a recipe for cataclysm. Nearly everyone is aware of situations like Bitconnect, one of many examples of an anonymous team ultimately making numerous unsubstantiated declares (such as having a “trading bot” that created the alleged profit for investors) that ultimately proved to be untrue.
While sire public-facing team members does not warrant a blank check of perception of legitimacy for blockchain projects (if QuadrigaCX is any display charge with), by now, it is certainly well understood by many in the industry that if a team is anonymous, there is almost certainly rough time after times ahead.
Not all coins with anonymous teams are scams, but most scams have anonymous teams. — Reza Jafery
Profit of this publication
HitBTC is the longest-running and potentially largest scale criminally fraudulent entity to ever exist in the blockchain hustle. It is my assessment the only reason HitBTC has been able to enact their scheme is due to being a “wolf in sheep’s apparel” in an environment where people don’t ask enough questions.
The purpose of this publication is to educate the public and ultimately serve as a denote to action for cryptocurrency users and the wider blockchain industry. While I wish I could say these issues will end with HitBTC, the authenticity is they won’t; HitBTC is one of many examples of entities in the blockchain industry that must be eradicated, whether via being move ated irrelevant by consumer decisions, intervention from authorities, legal action, or some combination thereof.
That spoke, solving the HitBTC problem sets a precedent for preventing the likelihood, frequency, and scale of similar problems in the future. While the experience market has done wonders in weeding out many scams and shitcoins, it has not weeded them all out — and a potential future bull vend is an enabler for these problems to recur, potentially in larger scale. However, if the industry and general public won’t stand for HitBTC now, correspond to future fraud is made more difficult in the future.
As a firm believer in blockchain technology, I often compare the widespread state of our industry to the internet in the early-to-mid 90s.
In the early/mid 90s, many people simply didn’t feel safe on the internet. Fake was rampant, and the perception was that little would be done in instances of fraud. Much like cryptocurrency is described as the “offbeat west”, the internet was perceived in the same way. Many events, initiatives, and circumstances took place to overcome this ha-ha, some of which included better training for law enforcement, regulation, industry leaders establishing initiatives and best technics (beyond the scope of what they were forced to do) and consumers speaking with their money. Every sector just described fits snugly with the modern blockchain industry and things that will need to drive place prior to mass adoption.
It’s not 2011 anymore. Let’s pretend we’ve been an industry for a few years and do a little self-policing of ourselves and our provinces.
This article is going to call out a slew of misleading statements, namely under the categories of AML/Risk/Compliance, HitBTC styles as justification freezing customer withdrawals when, in reality, nothing substantiates this. I’ve already established a track reputation for calling out Wall Street Journal journalists for LARPing as “investigators” — so it’s fitting to call out HitBTC staff for LARPing as dexterous in fighting fraud and laundering… especially when they enable it and conduct it themselves.
To the theme of the above, I operate on a consistent of objectivity that is required in my role as an investigator. When the facts presented in, for example, the ShapeShift/WSJ fiasco were what they were, I presented them as such — in the end, defending ShapeShift. If the facts regarding HitBTC (or any other entity mentioned or otherwise described in this publication) are what they are, mercifully, my analysis will be what it is. Point being: if HitBTC was able to factually demonstrate rebuttals to subjects addressed in this weekly or elsewhere, my stance would change. Spoiler: HitBTC isn’t going to do that.
This article is not representative of any other quantity I am affiliated with; all views expressed are mine and mine exclusively. I’m glad I’m getting this out of the way, because HitBTC isn’t prevailing to be the only one having some truthbombs dropped upon them.
This article is also not about any direct or anecdotal suffer I’ve had with HitBTC. The contents of this publication are based upon publicly available information as well as my personal assessment as a blockchain, forensics, sanctuary and investigative professional — no confidential or private matters are the basis for this publication.
HitBTC’s “Perfect Crime”: How?
No crime is “better”, but there are numerous characteristics of HitBTC (as an exchange, entity, and team) which, combined with the current environment of the blockchain latitude, have enabled this mass-scale fraud to be made possible.
So what would entice a potential cryptocurrency salesman to register on and use HitBTC? How many cryptocurrencies are listed on HitBTC and why? What transparency does HitBTC show and what does the energy need? What standards does our industry need, and how does the “average person” help the industry in reaching those standards?
Loudness and Liquidity:
“It is also easy to show that HitBTC volume is almost entirely fake.” — Bitwise’s report
HitBTC’s check in volume on CoinMarketCap and similar websites demonstrate what seems to be too good to be true metrics, which has fallen less than scrutiny from other analysts. While I could write extensively further on this topic, Bitwise’s publicize (as well as HitBTC’s predictable buzzword-filled response that didn’t provide any evidence-based counterpoints) speaks for itself. Predictably, no exotic audit or verification of HitBTC’s volume has been conducted, and you can rely on that never taking place.
Trading Joins and Listings:
HitBTC offers over 800 trading pairs, which combined with (alleged) high book and liquidity is an attractive aspect for obsessive day traders. Digging deeper, though, demonstrates this quantity of trading team ups isn’t to benefit cryptocurrency traders, but for HitBTC to line their pockets.
Of course, any exchange benefits from trading prepossessing place on their platform — whether this is a BTC/ETH pair on a highly compliant exchange such as Coinbase, or the Bitconnect (BCC)/BTC two of a kind on HitBTC. There is a fundamental difference between these two that must be dissected.
Responsible exchanges that fool the best long-term interests of the industry in mind will never list a cryptocurrency like Bitconnect, an outright Ponzi order that was assessed as such well before their exit scam. It was only after Bitconnect’s exit that HitBTC delisted BCC.
At fault exchanges conduct due diligence on any asset that they may list on their respective platforms. This is why more respectable exchanges, such as Binance, did not list Bitconnect. Responsible exchanges will often periodically conduct periodic reevaluations of assets listed on their stage and delist assets that fail to maintain authentic development and integrity; point being is that even under a hypothetical that HitBTC was initially under the impression Bitconnect was a legitimate operation (which, in and of itself, would not ingrain confidence in HitBTC’s competence) it’s impossible to say HitBTC was naive to Bitconnect’s inevitable fraud months prior to the exit scam. Peradventure it is not surprising that an anonymous team had no hesitation in listing an asset generated by another anonymous team.
Responsible barters will not list scam assets like BCC not only because they have the long-term interests of the industry in self-confident, but they also care about their customers. Even though some of their customers may want to profit in the minuscule term by trading these shitcoins, the responsible exchanges don’t want their customers to lose their money (which it determination always be the case that more lose than gain with scam coins) — or at least not on their principles.
Responsible exchanges will not be blinded by the short-term greed of obtaining profit via trading fees. This is a responsible deportment that cryptocurrency traders and the entire industry should reward responsible exchanges with by giving them organization — and should punish irresponsible exchanges by not giving them business.
This isn’t limited to just trading fees, but. Much public controversy stemmed from listing fees, even for reputable exchanges like Binance. HitBTC is conjectural to charge $250K for a listing in this document — which may seem extremely expensive, but considering that:
1: Larger reciprocates, at the time, were often charging seven figures
2: Shitcoins could easily raise eight figures or myriad during ICO alone, rendering a $250K cost to “check the block” of an exchange listing negligible — and instead of dropping $2M+ on, say, a Binance directory (presuming the project would even pass Binance’s due diligence, which is unlikely) this enables the shitcoin ICO to altogether pocket more money
3: HitBTC’s publicly presented volume would seem extremely attractive to any project, de jure or illegitimate, for that price
4: The general public tended (and still tends) to not heavily scrutinize which exchanges cryptocurrencies are catalogued on, as (at least for the day-trading types) they simply want to trade their shitcoins
Obviously, a $250K cost to file does not reflect an amount of work an exchange is doing to implement any cryptocurrency. HitBTC conducted aggressive outreach to calculates to close as many of these listings as possible with little or no due diligence on them — in short, listings on HitBTC were an peacefully way to make a ton of money for next to nothing. HitBTC takes it a step further with some legal word-twisting: it’s not a “bibliography” but an “integration”, making it somewhat easier to delist (or, more accurately, threaten to delist for erroneous reasons/extort) describes that were foolish enough to pay HitBTC once.
HitBTC isn’t alone here: LAToken conducts similar motions, with an even more aggressive outreach campaign consisting of numerous “Business Development” staff shotgun-blast cold-messaging conspire members on Telegram in attempts to get these projects to list on their platform; ironically the same methodologies that impersonation scammers oblige utilized to defraud individuals and businesses of tens of millions of dollars. Who can blame them — after all, why conduct reasonable safeguards to war fraud such as correspond via properly configured email when there is cash to grab?
A message regarding chronicle my token’s IEO on LAToken (I’m not the founder of any token, despite being an adviser for some projects.) This productive member of fellowship wanted to list “my” token on LAToken — well, more accurately, this was an impersonation scammer from Nigeria, but LAToken mace conduct outreach in the exact same initial way.
LAToken has listed numerous projects that have soft-exited, and that anyone with a remnant of investigative talent would have predicted as doing so with a few hours of due diligence prior to executing a listing treaty. While LAToken is a notable mention regarding “industry problems”, HitBTC is still, by far, the historical worst offender. LAToken is only cited as an example because they do have a public-facing team, and the point should be made that even changes with public-facing teams will happily list shitcoins (primarily inevitable soft-exits) to line their walk offs. This problem won’t go away with HitBTC.
Every time a project exit scams (whether outright take ones leave scam or soft-soft-exits), it turns off many people from the blockchain industry as a whole — whether those that qualified financial loss or their circle. Platforms like HitBTC and LAToken directly and indirectly enabled these reductions and set our industry backward (in many ways, but specific to this topic) by listing these shitcoins.
Key takeaway? Exchanges that evince scrutiny of what assets they list have both the industry and your best interests in mind. Dealings that conduct aggressive outreach and demonstrate no due diligence on projects (despite even having claims of doing so) lack to be made irrelevant.
Would an appropriately managed and non-fraudulent exchange require a team to be anonymous, or is this square a sane question to ask? Carlos Matos seems to know the answer.
HitBTC claims the reason their team is anonymous is for effects of “security.” Somehow, entire teams from other blockchain firms, to include all executives from all major well-thought-of cryptocurrency exchanges, seem to be fine with being public figures.
HitBTC’s old forums often had customers plead to questions about this topic. It’s no mystery why their forum never quite seemed to relaunch.
Cointelligence’s interrogation to HitBTC regarding this topic went predictably unanswered. Apparently, if no exit scam has taken place for five years, or luminary doesn’t have a direct experience with HitBTC’s fraud scheme, there’s no need to answer the question posed. This straighten out of question-evading isn’t tolerated in politics — why do we tolerate it in our industry?
While there is certainly security risk with being a important net-worth individual (or having, hypothetically, assess to significant assets) — there have been only a mischief-maker of events entailing physical attacks upon cryptocurrency exchange staff, and typically, of smaller exchanges. Some marrow points here:
1: If an exchange is utilizing security practices such as multisig, such attacks are moot (in context of thievery custodial assets) anyway, entailing such (unlikely and historically insignificant) attacks to be on the individuals net worth or perhaps extortion/release.
2: With a “normalized” trading volume of nearly $26M USD (as per CoinGecko)for HitBTC observed at the time of writing, this drive entail $18,200 in trading fees for HitBTC — on what seems to be a low-volume day. Take the nearly $335M trading sum total reported by HitBTC/pre-”normalized” and you’ve got nearly $235K. Either of these figures is vastly higher than HitBTC’s continually burn rate could possibly be — all costs, to include technical and staffing. HitBTC has the money to spend on physical guarding if they genuinely feel they are at risk. (Protip: it’s a facade.)
3: Major figures in cryptocurrency, whether Vitalik (Ethereum) or CZ (Binance) earmarks of to be doing just fine being highly public-facing. This is for a combination of two reasons: there isn’t anywhere near as much of a warning as HitBTC is trying to pretend there is (and, coming from a security guy that often needs to tell people they’re not being sheltered, that should say much) — and that ultimately negligible cost could ensure threats, actual or deemed, are mitigated.
4: Any benefit (exaggerated or legitimate) to the physical safety of cryptocurrency exchange staff is outweighed multiple times floor by the risk to public safety anonymous teams pose by nature. Put simply, if one wants to get into this line of matter, they should accept the fact that it’s (going to end up being) a public expectation they are public-facing.
In reality, the HitBTC rig is anonymous because when (not if) the day of reckoning comes — whether that is being insolvent to a level they can’t continue the discriminatory scam charade or it is action from authorities — nobody is willing to put their identity behind a fraudulent operation.
In in point of fact, it’s quite possible that the anonymity is so nefariously pre-meditated that even if authorities and/or the legal system pursued HitBTC, they’d be faade a myriad of on-chain obstacles (laundering) and business structural barriers. That’s bad news for the public if true — as it means that opportunities in sights for restitution are grim: a lengthy and resource-intensive process would be likely.
There is at perhaps a small silver lining in the HitBTC restricted to structural cloud for me, since it’s somewhat less likely (based upon HitBTC’s anonymity shenanigans) I’ll be facing a lawsuit atop of this publication, as it would put the identity game at risk — and likely result only in HitBTC finally getting the analysis they deserve for their criminally fraudulent activity.
It’s not libel or slander if the statements are true and fighting fraud. Amuse do try to sue me, HitBTC. (It’s worth noting that in the weeks since this publication went live, I haven’t been hit with a lawsuit — but I entertain been creeped on by some of HitBTC’s “business partners.” Kinda makes one ponder about how aware they are approximately HitBTC’s fraud…)
HitBTC’s other likely retort to this? They’ll pick another blockchain project’s line-up, such as Monero, that is anonymous. Apples and oranges: Monero isn’t holding client funds. While this isn’t to say (either way) if anonymous unites make sense under some circumstances, in the circumstance of being a custodial exchange, it does not make sense whatsoever — unless the sentiment is malicious intent.
HitBTC’s other-other likely retort to this? HitBTC might claim they have had some “reps” at, for criterion, conferences. These reps are in no way, shape, or form in any level of control of the company (if these “reps” are even employed by HitBTC at all, and aren’t perfectly event shills) and served only as a facade of legitimacy. These reps are no different than the Bitconnect reps just now at the hype party.
HitBTC is the only centralized exchange that does not require KYC upon signup for accounts with no limitations. HitBTC insist ons to “encourage” users to submit KYC documents to “avoid eventual verification procedure in the future.” This is the perfect “excuse” to deep-freeze accounts for random insistence on an initial KYC process — behavior that, quite literally, no other exchange exhibits, and is a gist component in their selective scamming scheme (more on that later).
Regardless of anyone’s personal opinion on KYC musts (a divisive issue) one thing that should unite “both sides” is this: it’s absolutely batshit insane that an anonymous tandem join up would ask for to dox yourself to them. There are no words to describe how insane not only that very request is, let alone how discouraging it is that our industry hasn’t called out that insanity. recent furor regarding Poloniex and customer data, maybe the only reason the realities of HitBTC’s KYC situation aren’t discussed is that those realities have gone on so crave that it’s considered “normal.”
Imagine being asked to verify your identity by submitting identity documents to woman that (want to or already) hold your money and won’t reveal who they are to you in 2019. Seriously. This is happening. This is a mania that is actually happening.
At best, HitBTC’s gathering of KYC is to assist them in determining the risk/reward in their particular scamming process: if they see a selective-scamming victim is in a jurisdiction where law enforcement and legal professionals aren’t as spun up on cryptocurrency, they’re more able to never return the cryptocurrency. Were KYC implementations truly focused on AML, HitBTC would have low deposit/withdrawal verges for non-KYC’d accounts, if present at all — the fact KYC is asked for after-the-fact is an “interesting coincidence”.
And here is the golden goose, as per HitBTC’s Reconciles of Use:
I’ve seen on dozens of occasions awaited HitBTC users asking if US citizens are permitted to use their exchange on Twitter and Telegram. Not even once have I seen HitBTC say no. For an “Stock Exchange” LARPing as “industry standard” in compliance, you’d think they’d know the answer to one of the most basic questions. Reality: HitBTC won’t know scold them no because it’s less selective-scam victims.
HitBTC is known for their disproportionately high withdrawal fees. Return withdrawal fees are primarily intended to finance the associated transaction fees, with perhaps a small percentile of withdrawal salaries being seen as acceptable for the exchange to pocket as part of compensation for running their service. HitBTC’s withdrawal salaries not only are grossly disproportionate to the actual transaction fees for nearly every cryptocurrency supported on their platform, but be superior to industry norms, often by no joke of a multiplier.
The disproportional withdrawal fees on HitBTC are yet another attempt to funds captivated from HitBTC customers. While if HitBTC was a legitimate operation, I’d simply opine that these withdrawal tolls were “their business” — it’s clear that these withdrawal fees are one (of many) elements to offset the solvency points by discouraging withdrawal and ensuring that even customers they don’t select for selective scam finance HitBTC’s flimflam artist further.
If you’re considering depositing assets to HitBTC (and the rest of this publication doesn’t dissuade you from doing so by postulate of the risk of your funds being locked for no reason), here is a handy resource that compares HitBTC withdrawal salaries to those other exchanges.
Pro tip: if you’re doing the smart thing and getting any assets off HitBTC, several assets like ATB, ELE, and DOGE (DOGE mentioned due to seemly having higher legitimate liquidity) may be viable routes for you.
HitBTC DOGE volume (due to customer exits) is likely to noticeably be promoted soon.
HitBTC’s accounting team, doxed above.
Before delving into the selective scamming subdivision of this publication, which is the section that will inevitably generate the most attention, it is critical to describe the outlets regarding the solvency of cryptocurrency exchanges, as it directly relates to how HitBTC enacts their scheme.
It is possible to do an estimate of an the Board’s solvency status based upon known hot and cold wallets of exchanges relative to exchange volume. While this is not a 100% metric, it’s a starting purport when no other methodology less an actual solvency audit exists:
Credit to Coinfirm on the above statistics.
As discussed anyhow QuadrigaCX, the exchange was insolvent well before the alleged death of their founder. QuadrigaCX is not alone: many other blockchain stick outs have taken funds from investors or customers and used them for unauthorized purposes, whether this is the bourses taking custodial assets for their personal use or ICOs mismanaging investor funds to conduct transactions well longest the scope of the proposed Use of Funds in their whitepapers.
Both these fraudulent exchanges and fraudulent ICOs “bank on” the indefinite public not scrutinizing them, as in order to “prove it”, one would likely need to hire both a blockchain forensics finished and an attorney to subpoena various services. Both these fraudulent exchanges and fraudulent ICOs make misleading and vacuous claims to mislead the public when confronted with suspicion. Having had served as an expert on numerous cases on the subject of suspect ICOs, I’ve described these tendencies in excruciating detail on a number of occasions that would depress anyone stressful to be optimistic about the blockchain industry.
As part of the administrative team for Crypto Defenders Alliance, as well as somebody that in reality desires mass adoption of blockchain technology, I continue to advocate for and applaud blockchain companies that demonstrate ambitiousness in problem-solving instead of waiting for regulators to force their hands.
Two great examples of this are Kraken’s Proof-of-Reserves and Bitbuy’s Solvency Audit, both of which are empathy methods to demonstrate solvency. These initiatives were not demanded by regulators, but Kraken and Bitbuy took time and fortune to make it happen because they believe their customers (or potential customers) deserve that level of transparency. You can bet that this wishes be a measure that exchanges that want to remain relevant within the next 3–5 years will all be winsome, provided that you speak with your money.
No exchange, to include HitBTC, has an excuse to fail to execute a solvency audit. While solvency audits are not everywhere conducted (yet), it’s probably a safe bet that most major exchanges with good reputations would pass these audits. There isn’t a snowflake’s unplanned in hell that HitBTC would conduct such an audit, and the results would inevitably be highly damning.
During the survive Proof of Keys, HitBTC was predictably struggling. This year is no different, with HitBTC demonstrating minimal make up for relative to volume.
Bitfi executives stated “this is not like fractional reserve banking; this is just embezzlement your money” — and that’s more accurate.
In fact, even armchair Reddit investigators have descried HitBTC having more of a given asset in order books than they have in known holding pocketbooks. Part of me wishes I had the time-bandwidth to perform my own forensics, as the results would be… intriguing.
My solace is that even more ‘double-dealing’ results would come from subpoenas or seizures, should that day come. (Post-publication, I performed a small amount of this sort of critique, which is included towards the bottom of this publication as an update.)
Another possible response from HitBTC commitment be something to the tune of “some exchanges stake custodial funds.” There is a big difference between staking customer stocks (standard banking practice) and spending customer funds — the latter depletes them and entails fractional reserve (or, more accurately, insolvency.)
Irksome to think of any other possible half-hearted response from HitBTC (which feels like initiating mass ritualistic planner cell suicide), HitBTC (probably wouldn’t have thought of this themselves, but let’s address it anyway) might seek that many of their hot and cold wallets are just not publicly known for “security reasons”. This does not see through the practice of practically every cryptocurrency exchange which provides these addresses to blockchain explorer sites and other databases.
There is minutely zero security risk in HitBTC publicly disclosing their wallet addresses, particularly if their claimed utilization of multisig is warrant. HitBTC could easily rebut this publication (as well as other criticisms and allegations against them) by verifying ownership of pocketbook addresses which reflect trading volume and liquidity represented on their platform.*
(*There are some technicalities here — to begin being that the proper way to disprove an allegation of insolvency would be an actual solvency audit. HitBTC might undertake to claim their liquidity is based upon some backend trading hence why wallets won’t reflect balances, but the disproportional assets of those steadies offsets that possible excuse.)
In the current status quo, exchanges that haven’t done solvency audits are fashionable adopters. In a more mature industry, exchanges that haven’t done solvency audits would be automatically hypothesized to be conducting suspicious activity — actually, they’d likely not exist at all. But it’s up to you, the exchange user, to make this expectation a authenticity.
So what is HitBTC doing with customer assets?
Short answer: obviously, not what they should be doing as a custodial swap. The obvious answer is “lining their pockets” and “yoloing.” You can bet that the insolvency of HitBTC has financed lavish lifestyles for those at the top of the HitBTC stratagem. Beyond that, your guess is as good as mine.
If I had the time-bandwidth, I’d probably start poking around a bit more at their completely/hot wallets. I did take a quick peek at their Ethereum wallets and noticed a disproportionate amount of interaction with the WETH erudite contract — a disproportionate amount that tells me, without even comparing trading volumes, based on my extensive trial on cases of this nature, it’s pretty likely HitBTC staff have and are day-trading customer funds — poorly.
HitBTC’s mechanics are little more than an attempt to draw in “fresh blood” to fuel a couple of different engines: their incinerate rate for lavish lifestyles of those running this fraud, and the burn rates for other categories, such as for the selective-scamming butts that caused enough fear (of financial loss) to HitBTC to get their money back.
This isn’t far removed from how a Ponzi trick like Bitconnect operated — the structural similarities (support staff, PR team providing misleading statements and half-hearted delivering of critiques, shills, and anonymous figures at the top profiting handsomely) between Bitconnect and HitBTC are certainly presented.
Every blockchain extend out I’ve had this suspicion about (misappropriation of funds, namely in day-trading and other forms of what is for all practical purposes staking assets that don’t belong to them) has, once investigated, had what were once my suspicions become fact.
As the case may be, in the future, I’ll do some blockchain forensics on this and share some tangibles.
Or perhaps HitBTC will send presented messages from wallets with balances appropriate for their order books…
The slam-dunk: HitBTC’s selective scamming
As split in the prior section, there was a spike of public reports regarding HitBTC locking customer funds during Data of Keys. It doesn’t take an investigator to see the forest for the trees here: a spike in locked funds on HitBTC during trial of keys doesn’t mean there was a spike in suspicious activity. There is no correlation between Proof of Keys and sceptical activity — unless that suspicious activity pertains to HitBTC themselves.
Brutal honesty: it shouldn’t take an intercontinental blog post of this nature to connect the dots for our industry. Find any other exchange with a Reddit as puzzled with fraud/frozen asset complaints as HitBTC’s — you can’t. Find any other exchange with as many accounts remarking on Tweets about the same — you can’t. That, in and of itself, should’ve been exposure enough for most to suspect the reality of a choosy scamming scheme.
It seems that only when cases receive extensive followup from HitBTC patrons that show actual interest in filing suit or creating large amounts of public PR damage (and subsequent crash on HitBTC’s fraud revenue) that many of these “AML cases” with HitBTC are resolved. Take for instance this exclusive, where an “AML case” had sat for five months and was quickly remedied after said case was described at a conference.
When it liking impact HitBTC’s “bottom line” (if such a financial phrase is even appropriate to describe income generated from trickery), HitBTC will “resolve” the issue. Riddle me this: name one other exchange that suddenly caved after a months-long “AML containerize” due to bad PR. You can’t.
This selective scamming has become so frequent that Reddit actually banned HitBTC’s account. Name any other altercation that had that level of action (banned from Reddit due to complaints and suspicion) — you can’t.
HitBTC’s likely rebuttal? “Compliance.” Don’t worry, I’ll tear that apart in a following section.
So what does getting selective-scammed by HitBTC look predilection?
1: It starts with a HitBTC user being unable to withdraw funds and opening a support ticket.
2: HitBTC discretion respond to the ticket, generally providing some vague timeline. Sometimes they adhere to the timeline and follow up; various often, they do not.
3: After the victim follows up, HitBTC may further extend the timeline, or ask for some “identity documents.”
4: The sacrificial lamb provides “identity documents” and then is given another timeline (again, typically resulting in the victim needing to court them down — HitBTC is hoping these victims forget/go away.)
5: HitBTC will extend the timeline for heterogeneous reasons, such as their “security department” needing more time to review the situation.
6: If the victim continues to “nag” HitBTC, HitBTC will then respond requesting some “additional information” — such as the creation of a video or charming of a selfie, and then request further time.
7: HitBTC will then (presuming the victim continues to keep require) follow up with a further delay or timeline.
8: HitBTC will then (again, presuming the victim continues to adhere to the email/ticket chain active) come up with an additional request. I have seen dozens of examples of these demands, few of which maintained relevance to any perceivable element of HitBTC’s purported reasoning for freezing the pertinent withdrawal. (HitBTC reasonable has a “playbook” of these requests for stalling purposes.) Many of these requests are entirely erroneous in nature.
9: HitBTC inclination continue this charade until either the victim gives up, enabling HitBTC to abscond with the cryptocurrency, or until reasonably pressure (typically, via PR that affects their money more than the money that they’re attempting to hoist from the victim) is placed. I’ve seen HitBTC continue this charade for cases spanning over eight months, and those are just the anybodies I’m aware of — stringing victims along with a little dose of hopium. In such examples, I’ve seen HitBTC demand the same documentation multiple times — perhaps laziness in the “support representative” looking at their script of excuses to hesitate further.
Ultimately, this is a ploy by HitBTC to make customers get frustrated, give up, and cut their losses. Since numberless do so, HitBTC keeps the assets — rinse, repeat. For the minority of would-be victims that do succeed in getting HitBTC to sing them their assets back, what HitBTC is actually doing is selectively scamming other customers — “pillaging Peter to pay Paul”, so to speak.
HitBTC will often ask the selective-scam “winners” (those that succeed in making HitBTC assume trust to that not returning that customer’s cryptocurrency will result in more financial loss to HitBTC than the level off of assets initially stolen by HitBTC) that they refund to delete or edit their public posts in arranged b fitting to mitigate their PR damage. The perceived hope from “resolving” the “AML concern” is a piss-poor attempt to paint (what is in truth their) selective scamming as something it isn’t.
When positive statements about HitBTC aren’t coming from “thankful” would-be victims getting their assets back, it’s likely those positive statements are coming from faker accounts in efforts to repair a (justifiably) damaged image of HitBTC.
HitBTC’s pre-existing public responses on these texts
HitBTC published a blog post titled “Proof of Silence. Does communication matter?” — which is strongly ironic, considering often the only “Proof of Silence” is their “support team’s” response to tickets from buyers they are selectively scamming. Of all statements, HitBTC claiming “there are no irregularities in platform’s performance or balance sheet” evidences the combination of deceit and lack of substantiating evidence that one could expect from HitBTC across the board.
HitBTC covers many gems of statements in this blog post, such as that they “focus on security of the custody” — likely, considering they’re unarguably insolvent, they haven’t. HitBTC further states they “haven’t been hacked” — but if “not being slaved” is the metric to be used when determining whether or not to use an exchange, this industry has far worse problems. It’s unsurprising that false and malicious actors may demonstrate decent cybersecurity practices — I haven’t exactly cased many scammers or hackers that had cybersecurity unfortunate enough to enable funds to be stolen back from.
HitBTC further suggests that “rumors and unfounded depositions are mostly spread by non-professionals or being paid for.” Par for the course, this is backed by exactly 0 evidence. Based upon the authenticity that HitBTC customers that are selectively scammed aren’t willing to front the costs for an attorney, I can assure you they’re not wealthy to pay (substantial amounts, if at all) for a smear campaign. The public posts from HitBTC users that have funds close out are all very real.
Numerous public figures, such as John McAfee (like him or hate him) have spoken out criticizing HitBTC — and I discern it unlikely they had financial interest in doing so. On the contrary, there are numerous posts with clear HitBTC shill accounts (click account usernames — most are check by now) that aim to mislead the public into thinking people have a positive perception regarding HitBTC.
Desperate times speciality for desperate measures, HitBTC?
HitBTC cherry-picks “AML cases” (interesting choice of words) in their blog post, stating these containerizes were resolved within “3, 12, and 33 days respectively.” If HitBTC is willing to share that level of facts, they should have, by premise, no issue in sharing the complete data set of quantity of “AML cases”, whether they were agreed, and dates. They won’t. Most of HitBTC’s “AML cases” go unresolved.
HitBTC outright fabricates AML successes in this blog column, stating their “AML team” (which, in likelihood, barely or doesn’t even exist) “were happy to uncover assigns on darknet websites advising to ‘never use hitbtc’.” As somebody with both extensive experience with the shadowy web and as somebody known as one of the most knowledgeable regarding cryptocurrency laundering methodologies, I’ve never seen such sentiment (avoiding HitBTC) from culprits — in fact, HitBTC is a viable laundering platform due to a lack of KYC requirement.
The only reason it HitBTC isn’t as utilized for laundering (and, quiet assured, HitBTC is still statistically more presented in laundering than most exchanges) is the selective scamming — conceivably the only reason another exchange with similar no-KYC account generation such as Huobi is more favored for washing.
HitBTC claims to not only have numerous compliance team members, but to have identified posts on dark web forums introducing their platform is seen as too compliant for laundering. Anybody that works in AML, Compliance, investigations, or a related field in this perseverance will tell you that’s laughably absurd.
HitBTC states that they have seen “bad actors saying fake documents or counterfeit materials for verification purposes.” While this does take place in the industry, it is nowhere not quite as common as HitBTC alleges within the context of quantity of “AML cases” they are presented with. To suggest that the measure of events of this nature experienced by HitBTC is somehow disproportionately higher to other cryptocurrency exchanges without base is bullshit.
Further, HitBTC would have a requirement to keep internal documentation on these incidents and notify law enforcement — I’d bet all I from that if HitBTC had their records audited, these “AML cases”, as described, would be exponentially over-stated in both measure and legitimacy. If HitBTC were teleported to a courtroom right now and had full access to their internal records, they want absolutely not be able to explain, on the spot, why they froze so many withdrawals. Giving a deceitful and insolvent entity like HitBTC an opening to fabricate stories doesn’t change the inevitable truth of what the clear reality now is.
I know methodologies of fraudsters/launderers definitely well, having had investigated more than I’d like to recollect. I state with confidence that HitBTC seal the funds of a fraudster (which would typically be stolen shitcoins; no competent fraudster will wash substantive aggregates of BTC/ETH through HitBTC in one pass) isn’t going to ruin their day. It’s unlikely this happens often, and the reaction from someone laundering heisted shitcoins would be “oh well” — and eating the loss. Anyone want to place a bet about what HitBTC does with these locked pelfs, in the potentially rare cases of fraudulent activity being identified (or, more likely accurate, HitBTC accidentally transmissible a launderer in their selective scamming dragnet)?
If you think that HitBTC is keeping those assets in some description of account, ready to provide to the victims of theft, I’m happy to place a wager on you being wrong. HitBTC simply cavities those assets — in essence, HitBTC profits off laundering. Their very structure enables this by design.
HitBTC shapes that law enforcement requires them to freeze user accounts or balances. This is one of the only true statements in their picket, but HitBTC shares it to grossly misrepresent the nature of the overwhelming majority of frozen assets. Such requests constitute, at most, a low (like as not fractional) single-digit percent of frozen HitBTC assets. Even for a legitimate exchange, such requests from law enforcement choice reflect infrequent occurrence, as by the time law enforcement is involved, the funds are typically withdrawn.
HitBTC does comply with law enforcement requisitions — it would not be within their interests to fail to do this. A centralized exchange that does not comply with law enforcement applications would simply become the next BTC-e; HitBTC knows this. Complying with law enforcement requests in and of itself doesn’t announce an exchange legitimate, but self-preserving.
There is an extensive amounts of well-founded public scrutiny on HitBTC, such as this article re what many perceive as HitBTC extorting Bitcoin Private. HitBTC is quoted in this article as stating (with respect to Proof of Keys and user withdrawals being frozen) “these temporary, safety-related withdrawal freezings are a direct consequence of our intercontinental KYC and AML measures. These rules exist and apply to us and everybody, 24 hours a day, 365 days of the year.”
Go ahead and handle one exchange that has a single-digit percentile of the locked funds claims that HitBTC has — or had this many issues round Proof of Keys. You can’t.
Suddenly, KYC and AML measures result in a spike of withdrawal freezing? That’s not how it works.
While most the bourses will have some level of KYC and AML measures (to include internal ones which, in fairness, are best left undisclosed publicly) — I immensely doubt HitBTC is a client of any major forensics/KYT solutions provider. In fact, I highly doubt much, if any, KYC/AML measures continue at all with HitBTC, within the context of “heuristics to identify suspicious transaction behavior and freeze suspicious accounts/withdrawals.” I invitation HitBTC to have a trusted third party review such procedures, which they certainly won’t do.
To cement my suggestion, I challenge anyone with the free time, curiosity, and funds to lose to make a couple of accounts on HitBTC: make oneself scarce funds from a KYC’d exchange such as Coinbase — say, $100 — and withdraw funds from a mixer or darkweb shop — say, $99 — and attend to which gets frozen. You (at this point most likely) won’t be surprised.
HitBTC staff wouldn’t be able to share or substantiate anything that would constitute “suspicious activity” — whether it is blockchain activity (sources of savings by exposure) or other metrics (certain email domains, IPs, regions, etc.) I’m highly doubtful such “AML measures” exist at all, nonetheless you can bank on HitBTC scrambling to fabricate some as a result of this publication.
HitBTC’s responses to entirely reasonable examines and criticisms always consist of one or two core themes: evading the question outright, or providing answers based upon exclusively irrelevant justifications.
On Yavin asked the “tough questions” (or for any legitimate exchange, questions that would never stay alive at all) to HitBTC and this resulted in the types of retorts you’ll see from HitBTC, whether about past criticisms or about this leaflet. To On’s credit, his description of HitBTC embarrassing themselves with these “justifications” is nothing shy of brilliant — Nigerian scammers understandable up with better stories than HitBTC’s.
Yet nothing has been done to shut down HitBTC. Why?
Despite all of the universal outcry, nothing of substance has taken place against HitBTC. Many losses are too small to be viable for lawsuits. Some surprisingly tilted ex-customers of HitBTC have tried to crowdfund a lawsuit with no success.
Frankly, it’s my assessment that try was doomed from the onset: while I am not an attorney, as an expert witness that has worked with many, I know a unimportant bit: such a lawsuit is likely to cost a lot more than the stated goal of $10,000. You’re likely looking at a base charge tag of $35–40K plus 30% contingency and that’s presuming items like discoveries and subpoenas have an average turnaround/amount of obstacles. (Attorneys, do feel free to comment with your take on this!)
As somebody that gets messaged approximately every day by victims of cryptocurrency scams/hacks, an unfortunate reality of most of these victims is they have no thirst to pay anything upfront. The risk a law firm would take in representing HitBTC victims is the same risk my investigative fixed would take in working pure-contingency cases, and when there are more clients willing to pay upfront than can be waited, it simply makes no business sense. It’s hard to justify working on something that isn’t even technically a “delayed payday” since it’s from A to Z unknown how much money “they” (they being a scammer/hacker for an investigative firm to case, or HitBTC in the took place of an attorney) have left or the difficulties in obtaining it. While in either case, it’s likely the answer is “enough money to lunge at it sound appetizing”, it’s just sub-optimal.
HitBTC has a mailing address in Hong Kong, entries in Wikis claiming European cool-headedness, a registration in Chile, a UK mirror company, a registration in Estonia, and the list is ongoing. Without taking more than a few mos to go down this rabbit hole, I can already tell you this is a deliberate effort to make service of documents, originations, subpoenas, and (obviously) holding specific individuals accountable nothing shy of a nightmare. While it’s not uncommon practices for businesses (first of all in blockchain, and especially exchanges) to have company structures that may seem unconventional, HitBTC’s is not even remotely comparable to anything that functions in a legitimate capacity.
HitBTC “banks” on this. HitBTC is aware that it would likely ultimately require wholly more money to chase them legally than someone that’s already experienced loss is willing to put up.
(That being revealed — if any of the independently wealthy want to have the long-overdue legal book finally thrown at HitBTC, I know several damned well-qualified attorneys I’d be honored to introduce you to, and you’d have the eternal respect of the industry, and I’d happily work with them as an cicerone.)
As discussed regarding HitBTC’s “compliance”, they’re compliant with law enforcement requests — just enough to have checked below the radar — or perhaps, at least below the radar prior to this publication… time will tell which way (law enforcement, legal, or financial via industry irrelevance) will cause HitBTC’s demise, but I propose we don’t wait for government(s) to intrude or somebody to finance legal intervention (though if either happens, great!) — let’s stop being bystanders and permitting apathy to occur in fraud and, consequently, set us backwards on the path to mass adoption of blockchain solutions.
Call to Action
I solemnly swear it is workable that cryptocurrency traders realize the long-term health of the industry/mass adoption of blockchain technology is more eminent than dumping shitcoin bags on an exchange they know is insolvent. I hold these truths to be self-evident, that HitBTC’s assets and burdens are not equal, that cryptocurrency users are endowed with unalienable Rights, that among these are transparency, shelter and solvency from firms in the industry, and the pursuit of a mature industry.
HitBTC’s selective scamming is only the “perfect wrong” as long as the blockchain industry and cryptocurrency users permit it to happen.
This publication is designed to be a public service commercial where content and any opinions expressed are solely my own. I had the privilege of collaborating with MyCrypto on The Sim Swapping Bible, which was exceedingly warmly received by the public and presumably resulted in more than a few people preventing heavy losses.
If this publishing doesn’t achieve the goal of eradicating HitBTC, but at least achieves the goal of sparing a few people from experiencing overpowering losses, it’s still a win — though I’m hopeful that the industry will rise to the challenge I present.
While I wish I had the time-bandwidth to do some to the nth degree in-depth analysis of some technical details (such as trading volume) or quantifying some elements of this (such as weight of “locked funds” posts for HitBTC relative to other exchanges), the reality is that I can’t invest that level of one day into this publication. (That being said, if any readers have strong research or statistics they’d groove on to see included in this publication, I warmly encourage you to contact me.)
Thankfully, there is some really strong work from others already subsisting on this topic, such as Coinfirm’s analysis/Cointelligence’s articles.
Here is your homework, conveniently broken down by demographic:
Wall streets: Start setting higher standards among yourselves. Don’t wait for regulators to tell you that you need to do solvency audits. Do it because it is the without hesitating thing. Do it because it sets a precedent for our industry to be seen as more mature. If you can afford to spend six figures on marketing and point development, you can afford to spend five on a solvency audit — whether you outsource it or do it (in a verifiable method) in-house. Speak with your specie, not your words. Besides solvency, I see some of you consistently at/in AML/Compliance events/groups, and some of you consistently not. This counts no-cost events/groups. In the medium-term, expect to be considered late-adopters unless you show initiative in these areas. In the long-term, assume to be irrelevant unless you show initiative in these areas.
Blockchain companies: Stop doing business with “attendances” like HitBTC that demonstrate excessive shady behavior combined with needless anonymity. This wouldn’t be adequate in any mature industry. Speak with your money, not your words. Looking at you, Bequant, Changelly, etc.
Influential/key casts: Stop being afraid to pipe up. Stop being afraid of being “controversial.” It’s absolutely unacceptable it took this prolonged for someone to call out HitBTC and educate the public. We need to do better. It’s not too late: sharing this publication would be a genuine start, as your exposure will result in someone reading this and not getting scammed by HitBTC. In your the actuality, speak with your words, because your words carry weight that, as a third order bring about, carries money.
‘Coin Metrics’ websites: Delist HitBTC, or you’re enabling them to continue the charade of legitimacy — and, by delegate, you’re an accomplice in their scheme as well as enabling fraud. Some of you already have tarnished reputations and would do reservoir flow to heed this advice; looking at you, Coinmarketcap.com.
Anyone with funds locked on HitBTC: At this point, unfortunately, the win out over bet may be to fulfill a baseline level of HitBTC’s requests — say, KYC (as much as it’s an unjustified ask, and as much as I advocate for data privacy, thinking middle-ground blueprint here.) If they fail to return your funds within 1–2 weeks citing a laundry list of ignores, I think the play at this point may be to tell them you’re going to file a law enforcement report.
Don’t continue their “compliance” absurdity — HitBTC will fear needing to answer to authorities and being unable to cite a reason for their “AML case.” Do not imperil a lawsuit unless you’re going to actually push forward with it, as HitBTC has heard these threats and it’s unlikely to be operational; it may even be counter-productive, as HitBTC may presume you’re “all bark and no bite.”
It’s safe to presume that less and less “AML cases” with HitBTC are common to entail recovery as HitBTC becomes more and more insolvent. While law enforcement may take a while to act, that magnitude of time may be equal to how long some HitBTC “AML cases” have gone on. And at the end of the day, would you rather work with public-facing in the flesh with your best interests (or at least justice) in mind, or work with the people that stole your on Easy Street in the first place?
Beyond compelling HitBTC to justify each “AML case”, more law enforcement reports filed against HitBTC force bring higher levels of attention against them. Here is a handy list of where to file a law enforcement surface for cryptocurrency crime.
Cryptocurrency investors/traders/everyone else: The brunt of the responsibility is on you. Speak with your affluent, not your virtue-signalling. Stop waiting on regulators. Stop waiting on “powers that be.” The most immediate and effective way to end HitBTC’s deception (as well as, generally speaking, foster an environment conducive to mass adoption) is through your actions! Namely, this embodies steps to enact a formula:
Less deposits and volume on HitBTC (resulting in fewer trade fees and fewer demanding scamming victims) + less custodial assets (due to withdrawals) = spike in “AML case” incidents (making HitBTC’s insolvency all the innumerable obvious) = catalyst to intervention on HitBTC or exit by HitBTC
1: Withdraw your funds from HitBTC now. The strong of future withdrawals succeeding will continue to decrease as the public becomes more aware of the necessity of avoiding HitBTC. You can safely guess that effective the day this publication is released, you’re in a race against the clock and statistics to successfully withdraw funds from HitBTC.
2: Don’t leave any further assets on HitBTC under any circumstances whatsoever. From this point forward, you’re either part of the mixture or part of the problem. Don’t fall to temptation to make some arbitrage trade (which is likely another method HitBTC utilizes to ensnare sets and selectively scam) or offload some shitcoin bags: instead, find another exchange, DEX, or (with appropriate due diligence, of conduct) sell your bags OTC/P2P. Not only should you not risk becoming a selective scam victim, but if you’re contributing liquidity/tolls to HitBTC, no matter how small, you’re perpetrating the problem. In short: don’t let your greed get the better of you thinking “it’s just a small amount”, because I can warrant you many others will think the same way. Bystander effect is a barrier to solving the HitBTC problem, the precise archetype of problem which is a barrier to mass adoption of cryptocurrency.
3: Share this publication wherever you feel it would potentially end someone without this knowledge from becoming a HitBTC user — and, consequently, become a possible selective-scam fool. This could be Telegram groups discussing which exchanges to use, Reddit posts, or HitBTC’s “favorite” — smidgin it into replies to their Tweets. (A note for Medium: preventing fraud does not constitute “brigading.” It is likely that HitBTC command attempt to report this publication with that “violation.”) Hit HitBTC where it hurts — their snitches. Translate this into different languages and spread it to hit as much of HitBTC’s customer (or potential victim) base. Vigorous it impossible for HitBTC to have any public posts (where they intend to lure in more victims) without the fait accompli surrounding their fraud not shortly trailing. Bonus points if you join HitBTC’s Telegram (https://t.me/EN_HitBTC) and send the component to other users. They “love” that 🙂
4: Report HitBTC’s accounts as fraudulent anywhere they exist. Their Reddit was already revoked; let’s guarantee HitBTC has any other platforms they may utilize to mislead new cryptocurrency users are minimized. Report their Tweets (as what HitBTC is doing is a appoint violation of Twitter’s Financial scam policy) and ditto their Facebook posts. Report their Bitcointalk account — after this biweekly, there is no reasonable counter-argument to banning HitBTC from there unless Bitcointalk moderators want to allow scammers to support freely. It’s disgusting that crypto YouTubers can be batted off en-masse, or this publication can be censored on Medium, but HitBTC has quietly has some free reign to utilize certain social media platforms to recruit victims.
5: Make it trend — augur loud and proud that you’ve withdrawn assets from HitBTC if you have, or that you spared a potential victim. I yield up carte blanche creative liberty to the cryptocurrency community to get this topic trending, but it’d make me grin ear-to-ear to see #sHitBTC trending — and I powerfully encourage using that hashtag if sharing this publication. If every Reddit/BTT thread and every Tweet had #sHitBTC and this hebdomedary linked, it’s pretty likely the problem will solve itself. Make it impossible for anyone to utilize HitBTC without aware the facts presented in this publication — and if they still elect to utilize HitBTC, well, their actions accounted for for their character, and if they’re scammed, it’s a lot harder to feel bad for them.
There are plenty of other efforts the public can split a hire to put an end to HitBTC. One great example would be gathering data on the amount of “AML case” withdrawal freezes reported on HitBTC contingent on to other exchanges — were this data all centralized, it would create some interesting hard statistics that could rather possibly draw attention from the right entities. To the public: the ball is now in your court.
We have the choice to alter b transfer HitBTC irrelevant, but it requires participation from the majority of the industry — big or small, person or business, rich or poor. Should we be a success in routing out HitBTC, we send a clear message to other would-be fraudsters, and we foster a more welcoming environment for latent cryptocurrency investors and adoption of blockchain solutions.
Alternatively, we have the choice of allowing HitBTC’s inevitable response to this, with a assortment of buzzwords and feel-good “we care about providing top service to our customers and take compliance seriously” — while lecture zero of the claims with anything tangible, to allow eyes to gloss over. We can allow this to perpetuate and go yet another year with this pattern, proving that no amount of facts and public knowledge outweighs the apathy of our industry, which only proves we’re years away from being a age industry.
Which of these two outcomes we see depends on everyone’s actions, including you.
You determine whether or not HitBTC exists this constant date next year. Go.
Update 1 (December 16th, 2019):
HitBTC seems to be in a bit of a panic after the publicity this bimonthly has received. Many have withdrawn funds, and predictably, the quantity of HitBTC selective-scam cases report on social device has spiked. HitBTC’s wallets continue to dwindle, with their BTC holdings under 90 BTC at time of writing. Diverse coins are mysteriously “down for maintenance” on HitBTC — which likely means HitBTC is liquidating them for BTC.
There has been far-flung backlash against HitBTC, to include in their own Telegram. Predictably, HitBTC’s admins (or paid shills, more accurately) are skirting the solvency indubitably:
Pro tip: liquidity is not solvency. Citing CoinMarketCap liquidity is not even close to answering the solvency question, and at this point, it’s overwhelmingly unhidden that HitBTC thinks people are too stupid to know the difference: their admins have been given a (laughably foolish) “playbook” and the excuses are running dry.
Update 2 (December 19th, 2019):
This publication has really picked up steam over the old times days, being shared on crypto news sites. Predictably, #sHitBTC is (poorly) attempting to play off the obvious with embarassing copypasta canned effects:
Obviously, a response published months ago doesn’t address this publication. Nor do any of #sHitBTC’s response even remotely look answers a legitimate company would provide.
If no other points are to be addressed, the following alone is telling:
1: The number of alleges about frozen accounts at HitBTC is an indescribable multiplier above the claims about frozen accounts at all other swops combined. This is not KYC/AML “industry standard practice” — and this point alone should be warning enough neutral for the uninitiated. For the initiated, a review of HitBTC’s correspondence with their victims doesn’t even remotely resemble correspondence in real AML-based locked asset situations.
2: #sHitBTC predictably does not address their solvency. It would take shakes to send signed messages from wallets with adequate balance.
Some firms associated with HitBTC, such as Bequant and CMC, press been informed of or even reached out to discuss this issue — often initiated by HitBTC’s request! They force out varying levels of concern, however, echo HitBTC’s request for “evidence.”
Reality: if “evidence” is to be defined as proving HitBTC isn’t document reports with authorities on AML cases, that would require legal action.
If “evidence” is to be defined as showing all of HitBTC’s purses and balances, that would be an action HitBTC needs to take. What I can, and may soon do, is publish what wallets are known for HitBTC — in all probability to be a significant portion, which demonstrates, by ratio relative to other exchanges, horrifyingly low balances and clear insolvency.
Not a distinguish person has come to HitBTC’s defense publicly. It’s quite telling.
Some in the community have taken to ensuring this gen is shared in HitBTC’s Telegram chat (which is a depressing yet amusing series of messages about locked funds; go reckon). Par for the course, #sHitBTC admins are enacting a “no FUD” rule and recently added a bot that will ban you for even saying the word “scam.” That’s a flourishing dose of paranoia!
Kudos to the cryptocurrency community for getting this shared on multiple news sites, translated into numerous phraseologies, and taking up arms. HitBTC is in a panic. Let’s deliver the death blow.
Update 3 (December 20th, 2019):
HitBTC is growing lose ones bottled, having had not only added a bot to their Telegram group that bans people for even saying the word “scam” and bolstering their admin cool, but bolstered their admin presence and seem to have set up shifts based upon this publication and the numerous dispatch sites it was shared on. Many would question HitBTC in their Telegram and get banned immediately after refuting puffery answers. HitBTC certainly won’t see this big reveal coming, but I’m sure you’ll all love it.
Here’s about 45 minutes of forensics on HitBTC’s billfolds relative to liquidity:
These Tweets provide the technicals.
Update 4 (December 24th, 2019)
Medium (or whichever inadequately trained club member) opted to take down the original post, likely after HitBTC’s numerous burner accounts broadcast it. Considering zero of the reasons (‘doxing’ being one of them, which is highly ironic) the publication was removed by Medium are valid, I’m reposting this dissemination on WUC. I request all that shared the Medium link for this publication to re-share this new (and permanent) home, as we were profit e avoiding extreme traction (hundreds, perhaps thousands of re-Tweets, top thread on R/Cryptocurrency for weeks, etc) — certainly, traction enough for HitBTC to fearful. Let’s show them Wu-Tang!