HitBTC is Facing Legal Action From Karma Group in Hong Kong

  • HitBTC is facing legal action from Karma Group
  • The exchange received 527.01 ETH for services from Karma
  • The legal action is due to HitBTC's failure to uphold its share of a mutual agreement between the two sides

Blockchain loan company Karma Group has filed legal action through a court in Hong Kong and a financial regulator against the cryptocurrency exchange, HitBTC.

The action was filed in relation to a payment Karma made to HitBTC for its support and services. Karma paid over 527.01 ETH, or over $307,000 for service which has, since this report, not been refunded to Karma.

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The legal action directly specifies the agreed services which HitBTC was paid to:

  • Providing blockchain implementation for Karma Group
  • Provide and advertise the listing of two trading pairs (against BTC and ETH), including press campaigning for it via Retweet
  • Provide an additional trading pair (USDT)

Up to the issuing of this letter, HitBTC had yet to provide any of the above-mentioned services, and has yet to refund the amount provided to them by Karma. The letter has specified a final deadline of return for the ETH payment for the 29th May.

Overall, this means that it's been over 60 days since the payment was first sent to HitBTC by Tim Novak, and nearly 40 days since a HitBTC representative went on record stating that the company would complete the obligations specified within the agreement.

The lack of communication, both in providing updates at the request of Karma and in announcing its progress on social media has left Karma with no alternative other than to pursue legal action.

According to Karma's CEO, George Goognin, the aim of the action is to highlight the need for transparency in the cryptocurrency world.

“The Karma team stands for transparency and a high level of business ethics. The fathers of the crypto economy were standing for freedom, but 100% freedom always comes with 100% responsibility. We're sure that the basic principles violation, especially by the big market players, is unacceptable. That's why we decided to create this international law case.”

Top-Tier Crypto Exchanges' Volumes Climb Back to One-Third of Total Market Share

The aggregate trading volume of top-tier cryptocurrency exchanges has increased by 61.2% during the month of January, while the volume of lower-tier crypto exchanges increased 46.4%.

According to CryptoCompare’s January 2020 Exchange Review, the trading volume of top-tier crypto exchanges – those rated AA-B according to its Exchange Benchmark – climbed last month to represent 29.3% of the total trading volume in the space.

The rise is significant as in December, the cryptoasset data provider’s report showed top-tier cryptocurrency exchanges were seeing their trading volumes drop as they lost market share to lower-tier crypto exchanges, those rated C-F. At the time, they represented 26.4% of the cryptocurrency market’s total trading volume.

top tier trading volumesSource: CryptoCompare Exchange Review

The report further found that exchanges that charge taker fees represented 76% of the total volume last month, while those that implement the controversial trans-fee mining (TFM) model represented 22%.

It also found that regulated bitcoin derivatives are still dominated by the CME, whose total trading volumes went up 145.6% since December. Grayscale’s Bitcoin Trust product (GBTC) saw its total trading volume rise 131% since December.

As for derivatives trading on cryptocurrency exchanges, in January OKEx represented the majority of daily derivatives volumes, trading $4.96 billion per day and capturing 31.1% of the total market share. Huobi traded $4.29 billion a day for 26.9% of it, while BitMEX traded $3.13 billion for 19.6%.

Pure crypto-to-crypto exchanges notably represented 75.4% of the market’s trading volume, in a similar proportion to the last two months. The stablecoin space, per the report, is still dominated by Tether’s USDT, as it still represents 94% of the total Bitcoin trading volume into the top four stablecoins.

Decentralized Exchanges Lose Trading Volume

CryptoCompare’s report also addresses decentralized cryptocurrency exchanges, noting IDEX was the largest one in January. It traded a total of $10 million as its trading volume went up 25.4%, and it was followed by Switcheo and Bitsquare. While these platforms’ volumes went up, DEXs as a whole have been losing volume.

dex CHARTSource: CryptoCompare Exchange Review

According to the report they have diminished 88% since early 2019 to now represent a small fraction of the global spot exchange volume. In January, decentralized trading platform traded $17.8 million in total, representing 0.003% of the market. In January 2019, for comparison, they traded $148 million.

Featured image via Unsplash.