The international cryptocurrency exchange HitBTC has lately decided to appeal to cryptography, in a bid to defend itself in a court case, against the Bitcoin Private team (BTCP). The legal tussle between the two parties began when Bitcoin Private accused HitBTC, the world’s 15th largest crypto exchange, of fraud. The allegations came following BTCP’s delisting from the trading platform.
However, in spite of the matter being sub-judice, the crypto exchange has decided to use cryptography to prove innocence. The exchange claims that the accusations by Bitcoin Private are false, as BTCP’s developer team offered the exchange an “unsuitable solution” for managing its scheduled coin burn. The exchange published a blog post titled “Explanation of the situation with BTCP”, in a bid to defend itself.
Primarily, HitBTC has accused the BTCP developer team, for creating custodial risk. The exchange claims that this could have put the whole company and all its client at risk and extreme volatility if the exchange did not take necessary steps to solve the problem.
Earlier in March, Bitcoin Private had decided to burn a few of its token, which triggered the whole controversy. The whole debacle could have been avoided if the Bitcoin Private would have shared the code of assets listed on the exchange, which it didn’t. Ultimately, HitBTC burned some of the tokens in its custody.
After it burned the tokens, the exchange duly compensated the users who held those tokens. HitBTC paid the compensation from its own pocket and later started accusing BTCP of not being compliant with the exchange’s rules and policies. In retaliation, BTCP’s team accused the exchange of undertaking fraudulent activities and attempting extortion. However, HitBTC still claims that users holding BTCO can withdraw their tokens from the exchange, though confirming that the coin will no longer be traded on the platform, due to the whole incident.
BTCP came into existence, resulting from a hard fork of the notoriously famous altcoin ZClassic (ZCL). Ever since it was launched in March 2018, coin burns have been a planned affair for BTCP. An event was scheduled for last month, during which all the unclaimed and unmoved tokens since the hard fork were to be burned. The event triggered the debacle, which is far from over yet. Acting upon knowledge, HitBTC contacted Bitcoin Private’s developer team, in a bid to secure the exchange’s client funds.
However, it got no support from BTCP. Eventually, HitBTC had to spend over $17,600 to compensate users affected by the coin burn, and it demanded the altcoin team to repay with 58,920 BTCP. In response to the demand, BTCP officially stated that the lost 58,920 tokens were being held secretly in Segwit Wallet. The team also alleged that the exchange was threatening the team of delisting if the demanded compensation was not fulfilled.
The two parties have now approached the court of law in hope for justice. However, the court is expected to take its time, as the matter substantially relies upon technical evidence, which takes time assessment.
In all of this, the major blow has been to the users, who had no choice but to be mute witnesses and accept whatever happened. Incidents like this make users lose confidence in the crypto space, which is already short on it. The crypto space is growing for sure, but such incidents need to stop.
One way of doing this is through regulation. Governments across the globe are taking efforts to regularize crypto markets, which sometimes seems unnecessary, however when such indents occur, regulations are sorely missed, as it becomes absolutely impossible to ascertain responsibility of one party without addressing the matter to courts, which take their own time to provide resolutions.