HitBTC, the cryptocurrency exchange has been around since 2013. From its humble beginnings it has grown to an exchange with decent volume and many mainstream and upcoming tokens are available to trade there.
I had been trading on Poloniex and HitBTC from the beginning of my adventures in the CryptoCurrency arena. In the beginning the industry was still gathering pace and exchanges were working hard to gain trust from their customers and provide a good user experience and protect their users from fraudulent activity.
As a regular visitor to HitBTC, I spent many hours analyzing charts, and choosing my investments. On December 2nd an announcement was made by HitBTC that MicroMoney (AMM) would be listed, as many new coin listing cause excitement in the community I am always interested in the results on day one. Talk in the TrollBox was as usual either FUD (Fear Uncertainty Doubt) or Shilling (Cheer-leading) the new coin.
At the point of listing the price took a steep dive, I had seen this happen before and I was ready with my precious USDT in hand and started to buy anticipating a bounce……However this was not to be, instead of bouncing up the price reduced further. So I began to buy more, attempting to hit the bottom.
The TrollBox was going wild……Was it a hack? Was it even AMM at all or some other coin? Experience has told me to be careful in these situations, so I stopped buying.
After several hours of trading suddenly the AMM/USDT pair disappeared from HitBTC. The next day I received the below email.
December 2nd, MicroMoney token markets at HitBTC exchange fell under the fraudulent actions which resulted in deviant token volume growth and significant price changes.
Due to the malfunction caused by fraud all trades are deemed illegitimate. As you committed trades and supported the fraudulent course of events, the amount of AMM bought will be written of from your account and no refunds are to be made.
HitBTC team apologies for any inconveniences caused. In case of any inquiries please contact us.
After talking to some colleagues on several forums, it seemed that this issue was most likely that HitBTC made an error on decimal placement for the database transacting the currency. So instead of a deposit of 100 AMM, a user depositing the currency was receiving 1,000. They then would then sell and drop the price, causing a crash. However this was never confirmed.
Maybe an explanation of the architecture of an exchange like HitBTC will help with understanding the possible error. So when a cryptocurrency is transferred onto a centralized exchange like HitBTC it is often put into air gaped storage to prevent hackers from emptying their accounts. Now to ensure that there is something to trade, the quantity of coins is displayed as a representative number in a table on a SQL sitting in their tech stack.
So when the ‘coins’ are traded between users they are actually just numbers being processed on the SQL and displayed on the GUI.
This highlights the major advantage of decentralized exchanges like Newdex. Where the tokens are held in smart contracts when placing orders.
I am fully aware of the risks in cryptocurrency trading, recently Newdex had a hack where someone created a fake EOS token and sent it to the exchange and completed what the banking world would call ‘washing’ by selling these fake tokens for real tokens and then withdrawing them.
However the response from Newdex was quite different from HitBTC, instead of targeting all users who traded the tokens, they issued a statement that all fraudulent tokens would be replaced and only ban the offending (depositing) accounts.
This to me is a sign of a organisation willing to accept that they had made a mistake, and fix the mistake to ensure that the customer is protected.
I have written this article to highlight that although trading cryptocurrencies is highly risky, the customer trust still needs to be maintained. For a currency, DAPP or exchange to be successful the basic customer service requirements need to be respected.
What have been your customer experiences with HitBTC or another exchange? Comment below
AMM/USDT – Extracted from my account history
Total Buys AMM 549,140
Average Buy Price $0.0003
Position AMM 548,910
Break Even Rate $0.0001
Unrealized P&L -$18,479.36