HitBTC, Who May Be Insolvent, Sees Users Complain About The New KYC Exchange Rules Imposed


HitBTC users are currently being asked about private information in order to be able to withdraw their funds.

The digital currency exchange is known for offering services without providing a lot of private information. The Bitcoin (BTC) developer Luke-Jr had to provide its information to be able to withdraw his funds.

HitBTC Asks For Excessive KYC Data

As the cryptocurrency market expands around the world, companies have to be compliant with new regulations imposed by different jurisdictions.

Cryptocurrency exchanges handle users’ funds and are usually requested to have as much information from users as possible. This is in order to be compliant with AML rules and fight against terrorist financing.

This time, Luke-Jr explained that they are “stealing balances of users.” He mentioned that the exchange is locking accounts and making unreasonable demands for private information.

In some of these cases, individuals cannot provide the information requested, even if they want to. Instead of closing the accounts down, they are just freezing the funds and not allowing cryptocurrency users to move them from there.

In a Twitter thread that Luke-Jr wrote, he said that their ToS claim that the user agreed to cooperate with the KYC when they signed up. However, the KYC situation that users are currently experiencing was not in the company’s ToS and it was added recently. Indeed, several individuals could have signed up to the platform because it offered no-KYC.

HitBTC explained on Twitter that all that they do is aimed at protecting their traders and they have to take these measures to enhance security. They know that these are very uncomfortable situations but safety, security, and integrity seem to be their top priorities.

As the exchange explained, the security precautions that HitBTC is currently taking are related to preventing international money laundering and also fraudulent schemes. Apparently, users are complaining of the bad service and procedure they have to confirm all the data provided by users, which is making investors worried about what will happen with their funds.

When users have funds in a cryptocurrency platform, the virtual currencies are not controlled by the users themselves but they are managed by the exchange. This is why users and investors are always advised to store their digital assets in hardware or cold storage wallets or other services in which they are able to control their private keys.

One of the users that reported issues with the exchange claims that HutBTC has frozen around $12,000 with the following message:

“The source of funds report has to describe all the actions you have performed with these funds before sending them to HitBC, 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.”

It is worth mentioning that the exchange has also been under the microscope due to handling a token swap in a not appropriate way. Users that held MaxiMine tokens that were locked out and couldn't realize their gains.

At the time of writing this article, HitBTC is the 21st cryptocurrency exchange in the market in terms of trading volume with $1.09 billion handled in the last 24 hours.

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