Will HitBTC Become Insolvent?

According to a recent report crypto exchange, HitBTC may become insolvent.

HitBTC currently has $3M in Bitcoin (BTC) and Ethereum (ETH) across its wallets as observed in recent audits.

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

As per the report, the exchange found to hold only 254 BTC in both their hot and cold wallets when profiled in April 8. Another snapshot from May 18 showed 243 BTC and 4945 ETH.

A total of three snapshots then calculated the total trading volume on HitBTC and showed that Bitcoin pairs had $537 million and Ethereum trading pairs amounted to $155.79 million. These numbers exhibit exceptionally low proof of reserves in both ethereum and bitcoin.

In contrast, Kraken, another crypto exchange has $56M in 24-hour trading volume among its ETH trading pairs with 2,893,695 ETH in reserve

HitBTC has not made know-your-customer (KYC) checks mandatory, however, it is being allegedly used to freeze customer’s accounts for prolonged periods of time on account of arbitrary accusations.

Moreover, it is worth mentioning that there was a new withdrawal fee hike close to 10-40 times higher that has coincided with the implementation of the new KYC regulations on the platform. According to the report,

“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 also been using the KYC requirements in order to refuse requests for a refund.

The lack of publicity and presence of the HitBTC team is also one of the primary red flags as far as the crypto community is concerned.

Thus there is ample evidence that shows HitBTC is highly likely to become insolvent and that it does not possess the reserves to support its trading operations. It is allegedly gearing up for this by limiting withdrawals in an effort to potentially exit scam its users.

HitBTC is currently 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. The HitBTC customers must tread carefully at this point.

Rishma Banerjee

Rishma is currently pursuing a bachelor’s degree in International Relations and has a special place in her life for sifting through all sorts of random trivia, thank you very much.