Daniel Mark Harrison, the high-profile Blockchain innovator who co-founded Zurcoin and who is the creator of the first synthetic layer of the Blockchain on which transactions with high-value properties are done, last week warned that cryptocurrency exchanges were mostly issuing fake currency units and that most cryptos traded on centralised exchanges were not real.
“Whereas nearly all digital currencies are cryptographic decentralised mediums of exchange, when they are traded on “cryptocurrency exchanges” they most often immediately become units of virtual centralised exchange, subject to the absolute control and power of the governors of the exchange,” wrote Mr. Harrison on his popular Medium Community Capitalism.
“[Cryptocurrency exchanges] manufacture cryptocurrency volumes in the form of virtual currency trades represented uncollateralised on their exchanges, in the hope of obtaining (stealing) the majority of their customers’ cryptocurrency over time.”
With less than 24 hours to go before the official Proof-of-keys event, Mr. Harrison has been proven at least partly-correct. This morning, HitBTC, one of the largest and most prominent exchnages in the cryptocurrency sphere, announced that it was locking its customer accounts, effectively disabling the withdraw feature from working. Proof-of-keys is a day that has been proposed whereby cryptocurrency holders take all the currency they own off the exchange so that theories such as the one proposed by Mr. Harrison can be proven to be true or untrue. By banning its customers from withdrawing their cryptos, HitBTC is implicitly admitting that it doesn’t have all the necessary coins that it says it does to cash out its customers. This amounts to a Ponzi scheme whereby exchanges hope to pay customers out of the amounts of digital currency that are incoming in future deposits.
Speaking exclusively to The Currency Journal, Mr. Harrison said that this sort of fraud would soon become a thing of the past as decentralised exchanges gained in popularity.
“With exchanges such as Bancor operating first class digital currency exchange platforms now we are beyond the era of decentralised exchanges being considered ‘graveyards’,” Harrison told TCJ. “You should expect to see quite a number of other centralised exchnages follow in HitBTC’s steps over the next 24 hours. But you see, that is the problem with truth – as much as you may want to, and in whatever way you may think you are justified hiding behind the shadow of your own delusions – it will always shed its light on who you are and what you did at the end of the day.”
“We need more guys like this in crypto,” said popular YouTuber Bix Weir on his show’s videocast. “Guys like this – guys who have the balls to stand up to these criminals.”
“I think it is a question of principle,” said Mr. Harrison in the interview. Last year, he was false-accused in a high profile class action cryptocurrency lawsuit that was later declassified by the judge and he was banned as a director in the UK as a result of one of his related detractors organising a mass-lynching of his reputation. Those individuals are soon about to be brought to justice, but Mr. Harrison is cool about the outcome.
“Some people have integrity, and it shows, whereas other unscrupulous types don’t. I have come across both, sometimes naively so. And almost invariably, the unscrupulous types come undone eventually, sooner or later. You are starting to see some of that happen here now, and it’s a refreshing change after the folly that went on last year.”