The developers of the privacy-oriented fork of the first cryptocurrency Bitcoin Private (BTCP) sent a request letter to HitBTC due to delisting, which they consider unfair.
The letter said that in May 2018, the project team paid $ 500,000 for listing on HitBTC in Bitcoin equivalent. At the same time, representatives of the platform received a copy of white paper, which described the mechanism of burning coins, which had to be used in the future.
Last December, analysts at Coinmetrics discovered that during the hard fork “special blocks” were issued with 400 additional outputs. In general, another 2.04 million coins were created on top of a limited emission of 21 million. Hidden addresses and the zk-SNARK technology made it possible to hide this fact, and the sale of coins could bring a dishonest developer up to $ 3 million.
After conducting their own investigation, the Bitcoin Private developers suggested destroying all the coins at the protected addresses using hard forks. Note that the team offered the community a more radical solution - the destruction of all BTCP coins that never moved - more than 12 million.
Users and BTCP-supported exchanges had to withdraw coins to new wallets before the #480000 block, so as not to lose them. Nevertheless, HitBTC allegedly did not take the necessary measures and lost 58.92 thousand coins during the burning.
Our team reached out to BTCP developers team with a request to help moving BTCP coins from a wallet that would not be safeguarded from a coin burn, however they could not provide us a reliable secure instrument to move the funds from the segwit addresses before the hard fork, which resulted in them burning a part of the funds still remaining in our custody. Never in the history of our platform our users have lost the funds kept in our custody and this is the practice we don’t ever want to disrupt.
It is noteworthy that in a tweet dated February 11, HitBTC noted that burning coins would not affect platform users, since their wallets were created after BTCP hard forks. The project developers called this statement nonsense.
As a result, representatives of Bitcoin Private appealed to HitBTC with a request to stop demanding compensation, since the exchange allegedly has no right to do so. In addition, the developers stressed that BTCP holders can file a class action lawsuit against the platform.