Cryptocurrency exchanges play a crucial role in the world of Bitcoin and altcoins. Despite their centralized nature contradicting everything cryptocurrency stands for, these platforms facilitate access to this new form of money. Not all exchanges are getting the best of feedback regarding their business operations, however. When it comes to HitBTC, the recent findings by Coinfirm seem to confirm people’s worst fears.
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Potential Liquidity Issues are a Problem
On the surface, all cryptocurrency exchanges look healthy enough. They generate plenty of trading volume and serve hundreds, if not thousands of customers each. There would be no reason to think anything is wrong behind the scenes. For HitBTC, it seems there are serious questions regarding the company’s liquidity and reserves. So much even that the figures are not adding up, according to what Coinfirm has discovered so far.
As is always the case when this type of information becomes public knowledge, it is important to keep a level head. While Coinfirm claims the exchange has roughly $3m in reserves – far below what they should have – the company has not run into any major problems as of yet. Claiming HitBTC is insolvent is a stretch too far at this time, albeit one should not ignore the potential warning signs either. Especially in this day and age, doing one’s own research is mandatory.
High Withdrawal Fees for Most Markets
One of the most often heard complaints regarding HitBTC is how its withdrawal fees are well above what one would normally pay. Granted, this heavily depends on which currency, token, or asset one is trying to withdraw. However, there is no reason to charge a fee that is several magnitudes greater than the industry average. It is something which is rather easy to fix, should the company desire to explore that option.
Unfortunately, it seems unlikely that situation will come to change in the near future. While it is evident this will cost them customers in the long run, the company has managed to remain operational despite these high fees. For novice users, this can prove to be a major “trap”, as they will receive far less cryptocurrency than initially expected. This type of business practice also sets a bad example in an industry which still struggles to gain mainstream traction.
Who is Running the Show?
Most cryptocurrency exchanges and trading platforms tend to have some of their staff publicly listed on the website. Especially the owner of an exchange tries to remain in the good graces of the cryptocurrency community more often than not. As far as HitBTC is concerned, no one really knows who is pulling the strings behind the scenes. That is rather unusual for many different reasons, as anonymity is not appreciated when dealing with centralized companies.
Finding any shred of information regarding HitBTC’s team is a futile effort. Not only is this information purposely hidden from plain sight, it seems no one wants to openly associate themselves with this exchange as part of their job profile. The LinkedIn page for the company claims there are between 2 and 10 employees, but never goes into specifics as to who these individuals may be. A very worrisome aspect, especially when keeping all of the other information above in mind.
Withdrawal Issues and Scam Complaints
Albeit it seems HitBTC has not run into any major problems, the company is not without blemish either. On the internet, there are numerous reports involving users who had to wait for withdrawals, saw their account get locked for no apparent reason, or simply claim the exchange is scamming some of its users. These are all serious allegations which need to be taken with a few pinches of salt.
Assuming there is any truth to these claims, however, there could be a very rough period ahead. Some of these complaints even hint at how the company is abusing customer funds for their own personal gain. While proving such a claim will be nigh impossible, it does cast a dark shadow over what is still a somewhat popular cryptocurrency trading platform. For new users, there are dozens of alternatives available which have a less than colorful history like this company.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency.