The developers of the privacy-oriented fork of the first cryptocurrency Bitcoin Private (BTCP) sent a request letter to HitBTC to the HitBTC exchange, which they consider unfair.
Dear #BTCP community – please read the legal letter below that uncovers your choice of code . https://t.co/Bp4Yjqp4Ez
– Bitcoin Private [BTCP] (@bitcoinprivate) March 9, 2019
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 forks “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 up to # 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.
The Coinburn has been successful as a circulating supply. Watch this space! #BTCP #BTC #fintech #crypto $ BTC #DeltaDirect
– Bitcoin Private [BTCP] (@bitcoinprivate) February 18, 2019
The exchange demanded damages from the BTCP team, blaming them for the incident, and then delisting the coins.
HitBTC custodial service proves its security and reliability yet another time. Read more in our blog post: https://t.co/ELUsWUKIO5
– HitBTC (@hitbtc) March 9, 2019
“The developers did not provide us with a reliable tool for withdrawing funds from SegWit addresses. The cause of the delisting is the inability of the project to protect its users from the effects of burning coins. You can't change blockchain rules if it hurts users. ”
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.
Recall hardfork Bitcoin Private took place on February 28.
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