Recently, in January 3rd, happened the annual proof of keys event. Created by Trace Mayer, it advises traders to withdraw all their Bitcoins to see the exchanges’ ability to provide solvency. Unfortunately, there were a few precedents which appear to have failed the annual occasion.
The loudest case: Singapore based BiteBTC.com reports fire three days after the occurrence
“On January 1, 2019, a fire occurred in the data center where the exchange servers are located, as a result of which part of the data on the main and backup servers was destroyed.
All crypto coins wallets are safe, but we need time to restore the balance sheets and trading history of about 7% of traders from earlier backups.
We ask to fill in the form to the support service with the indication of your recent transactions and operations with wallets.
We apologize and ask to treat this situation with understanding.”
BiteBTC.com provided no further evidence. In the meantime, many users complain about their account status as they neither can withdraw their funds nor access their accounts.
However, users can still create accounts at this time, and suspiciously enough, Bitcoin is trading at higher prices. According to CCN, this is a common exit-scam strategy. Even Coinmarketcap.com updated the status of the exchange saying: “We have received reports that user deposits are being withheld. Please be careful with your funds.”
We advise not to deposit any funds in this exchange while such confusion is in the air. We have sent reporters to Singapore to check out their headquarters for any evidence. More info is soon to come!
Many other exchanges report problems
Some crypto traders know that Poloniex freezes accounts, and locks withdrawals from time to time. This is the main reason why they don’t use that exchange anymore. This is no exception. During January 3rd, many people complained about their transactions taking even up to four days. People share no surprise with the exchanges ongoings.
On the other hand, Poloniex is one of the early bird exchanges in the crypto-sphere. It launched in 2014 and still is one of the largest and popular exchanges there is. Many traders start their trading days exclusively with Poloniex.
Bitfinex and Coinbase
Bitfinex is yet another exchange which reported issues on their platform exactly on January 3rd.
This tweet raised a lot of suspicion among traders. However, this was a very short issue. They resolved it in an hours time. So technically this does not apply as a failed Proof-of-keys issue. But weirdly enough, Coinbase also reported issues with BTC/USD trading pairs on their exchange Coinbase Pro. Tweeters started exchanging opinions about this weird coincidence. There was only a half hour between Bitfinex and Coinbase tweets. Go figure. All their services are back up and running now.
Trace Mayer’s proof of keys twitter thread became a place where people posted their observations about several exchanges failing Proof of keys. A Twitter user @ansalhar Ben Westgate posted a reply to Trace Mayer saying:
“@RobinhoodApp Failed Proof of Keys 2019 Promised and Did Not Deliver. “Coin Withdrawals At this time we don’t support coin withdrawals, though we plan to do so in the future.””
Moreover, Robinhood still is yet to answer to this accusation as their Twitter activity ends on January 2nd.
Although PurseIO is not an exchange, you can deposit Bitcoins within their platform. Purse allows users to buy things with Bitcoin via Amazon Prime. A Twitter user @crypto_senior posted that they have halted withdrawals “with no reasonable explanation”.
However, PurseIO’s support manager, with a Twitter username @Codiox quickly responded that everything within the site, including Bitcoin withdrawals, are working fine.
As we recently reported many complaints arose blaming HitBTC for freezing customers’ accounts. Lots of FUD were shared around the crypto-sphere, but now it looks like HitBTC is backing all these claims, and says they have responded to everyone in Reddit and Twitter as well. They blame Cointelegraph for creating articles in a biased manner, with a series of compiled quotes, saying: “We’re always in touch”.
Proof-of-work shakes up the crypto ecosystem.
All these precedents, except BiteBTC mysterious fire issues, are minor. All users’ funds are safe. But people have some thinking to do right now. You should ask yourself, whether you trust these exchanges. Because this year, you could say that Proof-of-keys was not that big of a movement. Trace Mayer is not that familiar within China-based traders and Asia in general. It could take time for this movement to reach that side of the world. But one thing is for sure – this movement will become larger and larger with every New Year approaching. Maybe this is the time when to switch to Decentralized Exchanges?
This subjective tweet sums this occasion up pretty well:
Photo by Luka Siemionov from Pexels