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HitBTC accused of Fraud after Delisting Bitcoin Private

HitBTC is once again grabbing headlines for all the wrong reasons. Recently, Bitcoin Private (BTCP) developers have accused the exchange of functioning in a fraudulent manner. The accusation is followed by the exchange delisting Bitcoin Private(BTCP), after a planned coinburn.

Petros Law Group wrote a letter to the exchange on February 26th and the letter was shared on Bitcoin Private Twitter profile on March 9.

Dear #BTCP community - please read the legal letter below, that uncovers @hitbtc and their questionable, unjustifiable reasoning behind the removal of Bitcoin Private from their exchange.

— Bitcoin Private [BTCP] (@bitcoinprivate) March 9, 2019

Per the letter, HitBTC made a malicious attempt to extort BTCP after inevitable consequences arising from the coinburn. Furthermore, as per the BTCP whitepaper, the scheduled coinburn was supposed to burn all unclaimed coins after the fork. However, after the launch, the exchange allegedly charged the team a listing fee of half a million dollars in BTC.

The letter includes screenshots of deleted tweets from HitBTC. It further explains that since the BTCP addresses of the exchange were created, users will not be affected by the coinburn event.

Moreover, a day before the coinburn, HitBTC requested assistance from BTCP to protect its user’s funds in a series of emails. Further, it was requested that BTCP must pay a compensation of 58,920 BTCP after the coinburn, to make up for the losses.

Exchange’s Personal Funds at Loss

The document highlights that BTCP addresses after the fork will,  not be affected, however, it was not a concerning issue for the exchange, as the user’s funds were not at a loss. Per the document, the exchange secretly held 58,920 BTCP in a BTCP Segwit wallet. And, the concerns over coinburn were over the exchange’s personal funds. 

Also, BTCP team informed the exchange that they would not accommodate the demand, but they provided technical assistance, to protect funds. 

On Feb. 17, the coinburn reportedly happened, one day after it was forecasted, and on Feb. 21, HitBTC allegedly threatened to pull BTCP support if the coin’s development team did not compensate 58,920 BTCP.

The coinburn took place on 17th February, and on the 21st of February, HitBTC had threatened to delist BTCP, if it did not compensate 58,920 BTCP. Interestingly,  the exchange released a statement on its official blog stating that the team was not supportive and didn’t provide a safe way to move funds.

 On the other hand, the exchange had compensated for losses, the truth of which is yet to be confirmed.

In December last year, an additional 2.04 million units of Bitcoin Private (BTCP) were reportedly secretly coined.