The issue with sending funds back to the wallet where it came from is that some users have deposited funds from an exchange.
I'm not sure if this is something that people want.

I've been in touch with the hosting provider. I can guarantee you that it was not an inside job. Also by looking at the living circumstances from the lead developer of Altilly, I can tell that this wasn't planned.

You mean the punching bag and the so-called decision maker  
I'm definitely not the leading tech guy behind Altilly and have never been.

I've joined the discussion and will read up in this thread and provide answers in a moment.

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So to answer the above questions.

The so far best method is to analyze the screenshots we request from users.
We have a method to verify the content of the screenshot which we are not able to share at this time.

All of the refunds could have been easier if we had honest users.
Unfortunately, people have been sharing their wallet address, txid, names and emails in telegram channels and on forums online.
There are even communities where certain people already know the addresses from their community members.
Because of this, we had to deal with a lot of fake refund claims.

During the initial refund claims, we even had to deal with people that created a youtube tutorial on how to claim refunds with funds they never had, simply by copying tx ids from other users.
Or by checking the master wallet addresses of Altilly, and then just copy the txid and claim a refund based on that.

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We've also stated in the Altilly_Refund channel on telegram that we will first handle refunds using the current method.
Once those are all handled (over 85k), we will look in to those that can verify the claims in other ways.

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Having only a team (if that's what you can call it) of 2 members, and after being in a full year of complete depression with the rest of the team falling apart, I can tell that it's a shitty situation that no one deserves.
We will do whatever we can to make sure that everyone is being refunded. It's going to take a lot of time and patience, but we will get there.

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About the person that wrote in this thread that our developer was incompetent about not having backups and losing everything. Please check this page https://qredit.io/altilly
I would have the same reaction as you, no arguing about that. But perhaps you want to take a look at that page and read the complete story before saying those things.