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Crypto Exchange HitBTC Appeals to Cryptography in Dispute With Altcoin BTCP


Crypto Exchange HitBTC Appeals to Cryptography in Dispute With Altcoin BTCP

HitBTC accuses the Bitcoin Private team of creating custodial risk and ecosystem instability in ongoing controversy

Cryptocurrency exchange HitBTC appealed to the specificity of its cryptography in an ongoing dispute with the team behind altcoin Bitcoin Private (BTCP). The post was published on HitBTC’s blog on Tuesday, March 26.

The dispute involves HitBTC’s delisting of the altcoin, whose team then accused the exchange of fraud.

HitBTC, currently ranked by CoinMarketCap as the world’s 15th largest exchange by adjusted daily trade volume, claims that the BTCP team had offered an “unsuitable” solution for moving its funds prior to a scheduled coinburn.

In the recent blog post — titled “Explanation of the situation with BTCP” — the exchange also states that the coin’s developers did not provide any code or documentation for specific transaction cryptography used in their blockchain. Moreover, HitBTC accuses BTCP of creating custodial risk and ecosystem instability.

Earlier this month — the day BTCP published its letter accusing the exchange of fraudulent activities — HitBTC revealed that BTCP had burnt a part of the funds still remaining in the exchange’s custody, on behalf of users. The exchange stated that it then compensated all resulting losses to its users.

In this week’s statement, the exchange claims that BTCP is still available for withdrawal from the platform and that its customers did not sustain any losses as a result of the coinburn.

The blog post does not, however, provide concrete responses to the previous allegations from the BTCP team, which accused HitBTC of an extortion attempt.

As Cointelegraph previously explained, BTCP was created in a fork from ZClassic (ZCL) and Bitcoin (BTC), with a notice of a future coinburn in its whitepaper. The event scheduled for mid-February 2019 was meant to delete all the coins that hadn’t been claimed or moved since the fork.

However, prior to the coinburn, HitBTC reportedly contacted BTCP requesting assistance to protect its users’ funds in a series of emails. The exchange further asked for 58,920 BTCP (about $17,600) to be given as compensation after the coinburn, due to expected losses.

BTCP reportedly insisted that addresses created after the fork would not be affected, therefore there would be no loss of funds. The altcoin’s team instead alleged that HitBTC secretly held 58,920 BTCP in a BTCP Segwit wallet and that the concerns over the coinburn were related to the exchange’s personal funds.

When the coinburn actually took place, according to the altcoin’s team, HitBTC threatened to pull BTCP support if the coin’s development team did not compensate the BTCP sum. In March, the coin was delisted from the exchange.

In early 2019, Proof of Keys’ organizer Trace Mayer had publicly suggested that HitBTC may be deliberately freezing withdrawals in the wake of the campaign. Mayer’s Proof of Keys event advocates a mass withdrawing of all funds from exchanges and other centralized third parties.

However, HitBTC dismissed the allegations, a company representative telling Cointelegraph: “These temporary, safety-related withdrawal freezings are a direct consequence of our international KYC and AML measures. These rules exist and apply to us and everybody, 24 hours a day, 365 days of the year.”

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