CoinIQ

HitBTC Exchange Review – A High Volume Exchange with Anonymous Leaders

HitBTC in Brief

HitBTC is a cryptocurrency exchange that caters to frequent crypto traders with features like low commission fees and commission rebates, margin trading and an accessible API. It’s a popular exchange that typically ranks among the top ten largest crypto exchanges by volume.

On the other hand, there are also quite a few negative aspects of HitBTC that might give one pause. The fact that its leadership has chosen to operate the exchange behind the scenes may be cause for concern. In addition, HitBTC has taken heat for being one of only a handful of exchanges that charges fees for depositing and withdrawing cryptocurrencies.

Pros

  • Market makers can scoop up rebates for placing trades.
  • Over 700 cryptocoins are available.
  • Margin trading available via HitBTC’s trading partner Weltrade.

Cons

  • The HitBTC demo is currently not available.
  • HitBTC’s corporate leaders have chosen to remain anonymous.
  • High withdrawal and deposit fees.
  • Controversy around an alleged hack that may or may not have occurred.
  • Customer service issues.

What is HitBTC?

History

Despite the fact that almost nothing is known about HitBTC’s founders, crypto traders around the world nevertheless use it to exchange millions of dollars worth of cryptocurrency every day. The exchange has consistently ranked among the largest exchanges by volume in the world since 2014.

Here’s a quick look at the major milestones that led to HitBTC becoming a major player.

Initial launch

HitBTC launched in February of 2014, just a few weeks after Mt. Gox– the biggest and most important crypto exchange in the world at the time– announced that withdrawals were completely halted. The vacuum created by the collapse of Mt. Gox created an opening for HitBTC.

In the run up to HitBTC’s launch, an anonymous group of venture capital investors from Israel poured more than $3 million into the new crypto exchange, according to a press release. Its unnamed developers promised to “spare no expense or effort to offer the best protection.”

Adding new features

Two months after HitBTC launched, it published a press release to help publicize its new feature: an exchange demo. The aim of the demo version of the site was to help potential HitBTC users gain enough knowledge and confidence to make real crypto investments. HitBTC attempted to build buzz around the demo by offering prizes like free Oculus Rift virtual reality headsets.

HitBTC continued to expand its feature set in the summer of 2014 when it added support for several new altcoins including DOGE, QCN, NXT, FCN, BCN and XMR.

Continued expansion

In September of 2014, HitBTC began providing trading data for TerraExchange, a swap execution facility. As part of their agreement, HitBTC agreed to help TeraExchange develop measures to counteract potential market manipulation and disruptive trading practices.

The following month, HitBTC announced that it would support the Bitcoin Gold fork and open additional trading markets. HitBTC’s Chief Procurement Officer Paul Clarkson provided the following comment about the expansion to CoinTelegraph:

“Regardless of our stance on the new chains, HitBTC believes that as long as they appear and the blockchain evolves, crypto technologies are moving forward. Our utmost goal is to give our clients the opportunity to choose while ensuring that they can safely store their Bitcoins on our platform during the forks and stay calm about their assets.”

The hack that HitBTC claims never happened

In February of 2015, CoinTelegraph reported that a “3-way exchange hack” involving HitBTC and two other exchanges resulted in the net loss of over $300 million. After publication, a representative reached out to the crypto news blog to deny that it was affected by the heist.

A new partnership

HitBTC partnered with Sequant Capital in April of 2018. As part of the deal, Sequant Capital agreed to help HitBTC with protecting its high net worth customers’ assets. HitBTC users with more than 500 BTC or 1000 ETH in their accounts can now benefit from new security features and other “high touch” services.  

Compliance issues in Japan

After hackers raided Japan-based Coincheck and the exchange lost $530 million worth of crypto, Japan made an effort to formalize its cryptocurrency exchange markets. The resulting tightened regulations resulted in HitBTC leaving Japan. However, the exchange says it has plans to reopen in the island nation sometime in the future via a “registered entity.”

Leadership and investors

HitBTC is one of just a handful of major crypto exchanges that are run by anonymous leaders. This lack of transparency has caused some to look at the exchange with suspicion. The mysterious leaders of HitBTC addressed concerns about the exchange’s lack of transparency on the official HitBTC forum:

“Our headquarters is located in Hong Kong, China. We are certain that revealing the confidential information has nothing to do with the exchange reliability. Due to the fact that we are totally responsible for our user’s funds only we can protect them – that is why some information about our exchange is confidential (etc. full address). CEO publicity can not guarantee the funds safety from the hack attack, but the security measures, which we are applying on HitBTC, can.”

Protecting customers’ coins

Legal and regulatory compliance

Despite the fact that the regulation situation around crypto exchanges isn’t clear in most regions, some attempt to comply with typical financial service standards anyway. Others– like HitBTC, for example– do not.

The HitBTC website contains the following disclaimer:

“Any individual (the “user”), who opens an account with HitBTC understands and accepts that crypto assets do not necessarily have a specific form of protection or regulation by any governmental body. The value of these crypto assets is highly volatile and speculative, extending the possibility of total loss.”

Because HitBTC is a pure crypto exchange that doesn’t accept any type of government-issued currency, it generally has to deal with less regulatory paperwork compared to crypto exchanges that accept both crypto and fiat deposits and withdrawals.

Coin listing policies

HitBTC lists over 755 cryptocurrencies, but very little specific information about how HitBTC selects which cryptocoins to list is available on the HitBTC website. A knowledge base article on the topic seems to suggest that HitBTC’s token/coin selection process isn’t exactly thorough.

The article begins with a claim that the people behind the exchange “meticulously check each company’s credibility and the coin’s technology to make sure only the most trusted cryptocurrencies with great potential are added.” However, the article goes on to state that this meticulous coin selection process is also “quick and efficient” and often only takes “less than 24 hours.”

Occasionally, HitBTC’s coin team will opt to “disintegrate” a coin and remove it from its systems. Disintegrated coins remain on the system for an unspecified “certain period of time” after which customers much reach out to the HitBTC’s support team to make a withdrawal.

Network security

Not much is known about HitBTC’s security system. A knowledge base article contains the assurance that HitBTC takes its traders’ account security “very seriously” and a reminder to use use strong passwords. Like most crypto exchanges, users can enable 2FA (Two-factor Authentication) to add an additional layer of security on top of their individual accounts.

As mentioned above, CoinTelegraph reported that a “3-way exchange hack” involving HitBTC occurred in 2015. After the story was published, HitBTC denied that it had been hacked and issued the following statement to the crypto news blog:

“We have not confirmed that the attacks are connected, moreover, our hosting partners have not confirmed that the incident is actually a hacker attack. In our Terminal, you can see an official notice about the payment system downtime. No user funds were affected on our side. We will allow deposits/withdrawals as soon as we finish the security checks on our side. Appropriate security measures are being implemented on our side and we have a proactive security policy.”

Customer support

In addition to standard customer support features like a self-service ticket system and a knowledge base, HitBTC has a unique community chat option that the exchange refers to as Trollbox. There are several different Trollbox chat rooms, which allow HitBTC users to communicate in 13 different languages. Volunteer moderators keep the chat rooms free of spam and ban users that type all caps messages.

HitBTC reputation

It’s hard to tell what the cryptocurrency community thinks about HitBTC. Clearly, traders are using HitBTC because it is currently the seventh-largest crypto exchange by volume according to CoinMarketCap. On the other hand, the exchange’s opaque response to allegations that it had been hacked in 2015 and lack of transparency regarding the names of its leaders is worrying.

Like most other crypto exchanges, HitBTC was plagued by customer service slowdowns and withdrawal issues at the end of 2017 and the beginning of 2018, when the price of bitcoin skyrocketed past $20,000. The surge of interest in cryptocurrency drew swarms of new users to all the major exchanges. However, HitBTC seems to have been hit particularly hard by its flood of new users.

In June of this year, cybersecurity pioneer / self-described “eccentric millionaire” John McAfee put HiBTC in the headlines when he criticized the exchange’s high fees on Twitter.

“The crypto exchanges have become the thing that we have originally fought against. Their power is immense. Hitbtc, for example, has increased suffering for millions of poor people who cannot afford the minimum buy-in since it is greater than their monthly income. Boycott them.”

HitBTC won’t process orders involving less than a certain specified “lot.” For example, HitBTC’s bitcoin lot is 0.01 BTC– or, roughly $75.

HitBTC responded to McAfee’s criticism by asking him to propose an “algorithmic solution” to the “important problem” that he had raised. McAfee then threatened to “donate $20 million to a class action lawsuit” against HitBTC.

How to Join HitBTC

Who can join?

HitBTC is available almost everywhere outside of Japan. As mentioned above, Japan decided to tighten its crypto regulations after hackers raided the Japan-based exchange Coincheck. HitBTC responded by deciding to temporarily block its Japan-based customers from using the site while it attempts work out how it will comply with the new rules.  

Outside of Japan, HitBTC doesn’t use blocks to prevent people from using HitBTC in regions where it may be illegal to buy and sell cryptocurrency.

HitBTC’s Terms of Use document contains the following clause:

“You further represent and warrant that you will not use our Services or will immediately cease using those if any applicable law in your country prohibits or will prohibit you at any time from doing so.”

Verification

Individual accounts

Though anonymous users can use HitBTC, the exchange reserves the right to ask their users for identifying documents should the exchange determine that it is necessary to do so.

A knowledge base article sheds some light on HitBTC’s approach to verification:

“HitBTC Risk Management team is responsible for monitoring overall trading activity in accordance with AML/KYC rules. Know Your Customer (KYC) verification procedure is required to verify the identity of HitBTC users. The procedure includes sending certain scanned documents to the Compliance dept. and a background check. It is an important step to enhance security of our traders.”

HitBTC users can opt to verify themselves in advance. However, to gain approval for pre-verification, they need to:

  • Have a portfolio worth at least 500,000 EUR.
  • Place at least ten “significant” sized transactions per quarter over a year.
  • Accrue at least one year of experience working in the financial sector.

Users that meet those requirements can enjoy four benefits after completing the pre-verification process: additional cold storage security, limitless deposits and withdrawals, customer service via a personal broker and the ability to place OTC (Over-the-Counter) trades.

Business accounts

Anyone interested in creating a corporate account on HitBTC has to reach out to the HitBTC relations team and schedule an interview.

What Can You Trade on HitBTC?

Cryptocurrencies

Currently, HitBTC lists over 755 cryptocurrencies. That’s far more coins than most major crypto exchanges.

Fiat currencies

HitBTC doesn’t support any government-issued currencies. However, HitBTC’s interface integrates with a non-custodial exchange called Changelly. Changelly provides a somewhat expensive but convenient way to make cryptocurrency purchases using a variety of payment methods including debit and credit cards.

Related: Changelly Review: Quick and Easy Trades but No Advanced Trading

Currency exchanges

Though HitBTC offers well over 700 cryptocoins, you may have to perform two trades to complete your exchange if the cryptocoin you want to acquire in is a particularly rare or hard-to-find one. All HitBTC trades flow through just five cryptocurrency markets: BTC, ETH, USDT, DAI and TUSD.

Advanced trading

HitBTC offers a number of advanced trading features including customizable orders, margin trading and an accessible API (Applications Programming Interface).

Customizable orders

HitBTC has a number of advanced trading features that allow you to customize your order.

  • Market orders can be fine-tuned through the use of the stop order function.
  • Limit orders also have stop order functionality and can be further adjusted through the use of a drop-down box.
  • Scaled orders let you place multiple buy or sell orders, which are automatically distributed across a customizable price range.

Margin trading

HitBTC’s Margin Trading interface button takes you to HitBTC’s margin trading partner, Weltrade. After you download the Weltrade app and sign up for Weltrade, you can borrow money to buy “cryptocurrencies with the most market liquidity and their cross сourses.” Weltrade/HitBTC offers accounts with the leverage of 1:3 and 1:10.

API access

HitBTC provides programmatic access to its trading engine through HitBTC REST. Details are available at https://api.hitbtc.com/.

Trading Tools and Fees

Trading interface

This is HitBTC’s main interface. Available markets are displayed in the Instruments section of the dashboard.

Source: CoinIQ

The Account tab features a link to Changelly, a non-custodial digital exchange that supports credit card buys. You can also send money into your HitBTC account by clicking the cryptocoin that you want to deposit.

Source: CoinIQ

The Markets tab features real-time charts, an order book and other useful tools.

Source: CoinIQ

The MT4 Weltrade app is a downloadable program that runs on Windows, iOS and Android. There’s also a web version of MT4 that can run in your browser.

Source: CoinIQ

The demo version of HitBTC that the exchange promoted in a 2014 press release is no longer available. Apparently, HitBTC shut down the demo so that they could revamp it:

“We are currently working on the new version of Demo Trading service! Sorry for any inconvenience it may cause. Please, find frequently asked questions about trading and account operations explained at FAQ section. Stay tuned to our news on Blog, Twitter and Facebook.”

Mobile app support

HitBTC doesn’t have any official apps. The official HitBTC twitter account recently warned its followers against downloading third party HitBTC programs:

“We don’t have official Android/iOS apps. Apps which imitate HitBTC image and feel, are designed to steal your personal data. Be careful.”

Deposits and withdrawals

Fiat currencies

HitBTC doesn’t support any government-issued currencies. A knowledge base article explains the exchange’s views regarding fiat money:

“Currently fiat currencies (US dollars, euros, British pounds etc.) are not supported on the exchange as trading instruments. And there is no way to associate your HitBTC account with your bank account. However, you can buy Bitcoin using your Visa card. This option is available on the very top of your Account page and is provided by our partners from Changelly. You will need to send the purchased coins to your BTC deposit address on HitBTC.”

Digital currencies

HitBTC is one of the only crypto exchanges that charges its users a fee for depositing cryptocurrency onto its system. The exchange explains the logic behind its bitcoin deposit fee in a knowledge base article:

“Flat fee for BTC deposits amounts to 0.0006 BTC for each deposit of this currency disregarding the amount of deposit. Bitcoin deposit fee is charged in order to enhance our platform capacity, speed-up your transactions and avoid overload with small operations so that to provide best service to our traders. There are no fee for other currencies deposits.”

To withdrawal bitcoin from HitBTC, its users have to pay a hefty fee that comes out to around $7 USD. Fees for withdrawing other cryptocurrencies are quite high as well. Here is the rundown:

  • BTC: 0.001 BTC
  • ETH: 0.00958 ETH
  • ETC: 0.002 ETC
  • USDT: 100 USDT
  • STRAT: 0.01 STRAT
  • LTC: 0.003 LTC
  • DASH: 0.03 DASH
  • XMR: 0.09 XMR
  • BCN: 0.1 BCN
  • ARDR: 1 ARDR
  • STEEM: 0.01 STEEM

Transaction fees

HitBTC’s low transaction fees explains why an anonymously run crypto exchange has so many users. The exchange rewards market makers (or in other words, traders that add to an exchange’s liquidity) by offering them a 0.01% rebate every time they place a trade. Even market takers enjoy a low 0.1% commission fee.

Final Word

If you’re an experienced trader that doesn’t mind doing business with an anonymous exchange, HitBTC’s low fees and wide range of supported altcoins may tempt you to join. However, other newer exchanges have better track records and comparable features.

For new traders

HitBTCused to host a demo version of its exchange, which allowed users to learn about how all the features work in a risk-free sandbox environment. However, HitBTC may have changed its marketing strategy. It now seems that catering to the needs of institutions and professional traders is the exchange’s top priority. Though HitBTC still maintains its helpful Trollbox chatrooms, the demo version of HitBTC was taken offline several years ago

For advanced traders

HitBTC has many features that cater to frequent traders. The most notable of these may be its commission fee system, which rewards market makers with rebates for adding liquidity to HitBTC’s markets. In addition, HitBTC offers enhanced security for its premium account holders and lists more altcoins than any other major exchanges.

Alex Munkachy

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