HitBTC, the exchange reeling in a slew of controversies arising due to several claims of the exchange being liquidated, has responded with positive action. The Hong Kong-based exchange recently entered into a partnership with CoinGecko, the cryptocurrency data aggregator lauded for the introduction of the “Trust Score” volume estimator.
Following prolonged maintenance issues, the exchange announced the partnership which boasted a core objective of “transparency,” in the “fight against fake volumes,” an ironic statement in light of recent proceedings. The tweet read,
Dear traders, we are pleased to announce the partnership with @coingecko in the fight against fake volumes and providing global transparency. Read more in Coingecko blog: https://t.co/OPIBiB7eUZ pic.twitter.com/HUkfVV4Nvi
— HitBTC (@hitbtc) May 27, 2019
The research published by ProofofResearch on May 18 stated that the exchange had only 350 BTC remaining and that users are unable to withdraw their funds from the exchange’s accounts. Cointelligence highlighted that HitBTC had only 245.2 BTC valued at $3 million, along with some ETH in their wallet. The latter report also highlighted the exchange’s use of KYE as a “masquerade,” to “swindle funds on an indefinite basis.”
Bitwise, the crypto-asset management firm, added to HitBTC’s woes in their May 24 report, stating that the exchange’s volume was “almost entirely fake.” Accusing the exchange of engaging in “wash trading” employed in “small trade sizes,” the report evidenced the same by stating, among others, that the volume on the exchange did not follow the “real” exchange volume, hence concluding that it was not affected by larger industry movements.
Interestingly, the timeline of these events could not be more telling. CoinGecko, the market aggregator, released its “Trust Score,” less than two weeks ago with the objective of catching exchanges that “fake volume.” The company aims to provide a more wholesome approach to volume calculation by busing web-traffic and order book data.
CoinGecko stated that it would employ the use of Average Daily User Trading Volume [ADUTV] based on the median volume of 10 exchanges, as listed out by the March Bitwise report. Bobby Ong, CEO of the markets aggregator, stated at the time that exchanges will be monitored for “reasons of concerns,” and if any discrepancy is noticed, the “methodology will be altered.”
Since the announcement of “Trust Score”, three separate pieces of research have been released, one addressed specifically to the SEC, quite clearly stating that there are several concerns about the information presented by HitBTC and their trade volume.
It should be noted that HitBTC have since responded to the claims put forth by ProofofResearch, stating that “a subset of hot wallets” balances are not representative of exchange’s total assets. With regard to KYC concerns, the exchange stated that their area of focus will be on the protection of market participants and the elimination of bad actors.
Given the release of the Trust Score, followed by the barrage of accusations against HitBTC regarding their volume reporting, and withdrawal problems, the partnership with CoinGecko bears incredible importance. This partnership could be the exchange’s effort at mending incorrect ways or it may just be an attempt at blowing smoke to confuse the crowd.
The host of the Crypto Monsoon podcast, The Crypto Monk, didn’t buy the claims of the exchange coming clean and stated,
HITBTC WILL FREEZE YOUR ACCOUNT.
DO NOT DEPOSIT ANYTHING ON HITBTC.
— The Crypto Monk (@thecryptomonk) May 26, 2019
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