Bitcoin Private developers (BTCP) have accused HitBTC of being fraudulent in regards to their exchange delisting after a planned coinburn. Bitcoin Private (BTCP) is a popular privacy-centric cryptocurrency. It is the fifth largest cryptocurrency exchange according to CoinMarketCap.
The legal letter sent by Petros Law Group on behalf of BTCP via email to HitBTC detailed a timeline of events leading to a disagreement between developers of HitBTC and BTCP. The disagreement finally came to an end with HitBTC delisting BTCP after BTCP devs failed to comply with the request of HitBTC to compensate for the loss of user funds.
According to the document, BTCP was created in a fork of ZClassic (ZCL) and Bitcoin (BTC) at the beginning of March last year with a notice of a future coinburn in its whitepaper: the scheduled event was intended to delete all the coins that have not been claimed since the fork.
HitBTC reportedly charged a listing fee to the BTCP team on March 3, 2018, the day after the launch. The document also includes screenshots of apparently deleted tweets from HitBTC in mid – February, which explained to users that since the BTCP addresses of the exchange were created after the fork occurred, the coinburn will not affect users.
They reached out to BTCP developers to solve this situation and move BTCP coins from a wallet that would not be affected, according to HitBTC. They say, however, that the team behind this virtual currency was unable to provide a reliable and secure tool for moving the funds to the hard fork. That’s why some of their money has already been burned.
On Feb. 15, one day before the coinburn was planned, HitBTC reportedly contacted BTCP requesting assistance in a series of emails to protect the funds of its users, which then escalated into a request for compensation of 58,920 BTCP due to expected losses after the coinburn.
However, since the document emphasizes that BTCP addresses created after the fork won’t be affected, the exchange didn’t worried about the loss of funds from users as that situation did not exist.
HitBTC released an official blog statement on 9 March stating that the BTCP team could not provide a safe way to relocate the money before burning, but that the trade compensated for all loss of custody.
The bottom line is that nothing was wrong with BTCP. In order to address their alleged “technical problem,” BTCP provided HitBTC with immediate, effective solutions. HitBTC knew that their BTCP segwit coins would be lost in the coin burn, but that they did not want to make it public because HitBTC misled their users last year by saying that HitBTC would not support the fork.
HitBTC has been the guardian of all of BTC’s user customs for BTCP Segwit coins during forks. It is not yet established whether or not HitBTC has manipulated BTCP’s prices over the last year by trading BTCP. What can be verified is that the Coinburn has taken place, Hitbtc has lost the BTCP Segwit coins and is now holding the entire BTCP community hostage until the 58,920 BTCP is reimbursed.