Latest Report Backs Up Claims About Cryptocurrency Exchange HitBTC Being Insolvent Possibly


According to a recent report released by Cointelligence, HitBC has only $3 million in Bitcoin (BTC) and Ethereum (ETH) held on its wallets. Cointelligence gathered this information from a crypto organization called Coinfirm.

This confirms fears of crypto users that believed that the the exchange was seizing users’ funds due to a very hard KYC and AML policy.

Could HitBTC Be Insolvent?

In this report, Cointielligence says that on April 8, the exchange held 245.2 BTC in their hot and cold wallets. There have been three snapshots that calculated the total trading volume on HitBTC and that showed that Bitcoin pairs had $537 million and Ethereum trading pairs amounted to $155.79 million.

As per this report, if we compare the disparity between proof of reserves and Bitcoin trading pair volumes with other exchanges such as Kraken, Bittrex or Poloniex, it is possible to see that there is a large disparity.

It is worth mentioning that there was a new withdrawal fee hike that has also coincided with the implementation of the new KYC regulations on the platform. The report reads as follows:

“Name, address, citizenship and photo ID are all ways in which KYC can be implemented – it seems that HitBTC’s no ID policy was designed to get customers on board before the u-turn gave them a convenient excuse to freeze accounts.”

Apparently, the exchange has been using the KYC requirements in order to refuse requests for a refund.

We’ve written about it a few days ago, explaining that the exchange has been imposing very hard regulations for users to extract their funds. Some of them were saying that the platform was directly seizing their funds.

One of the users that claimed that HitBTC was carrying out a fraudulent scheme was Luke Jr, a recognized Bitcoin developer. He said on Twitter that the exchange was stealing balances of users. They are locking accounts and also making unreasonable demands for private information that people cannot provide even if they wanted to.

He said that instead of closing the accounts and sending the funds to users, they just keep the funds themselves.

About the large withdrawal fees, this is a recurrent complaint that affects users and their operations in the platform. It is worth mentioning that there is no reason to charge a fee that is several times larger than the average fee in other crypto platforms.

Back in 2018, John McAfee started an anti-corruption alliance against HitBTC and he decided to leave HitBTC because he says he is fighting against banks and governments, that are connected with crypto platforms. As the virtual currency industry wants to expand, the situation that HitBTC is currently experiencing is not positive for the whole crypto space.

Although the crypto industry is always supporting anonymity and privacy, HitBTC is also criticized because nobody knows who is running HitBTC. There is no information regarding who is behind the exchange or who is powering it.

At the time of writing this article, HitBTC is the 13th largest digital currency exchange in terms of trading volume. In the last 24 hours, the platform registered over $1 billion in trading volume.

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