Well done, good sir.
If drawing a character someone else designed is stealing, then there are a lot of Newgrounds users who steal from Nintendo.
The character itself might have a simple design, but your use of shadings and gradients are quite good and works well with the simplicity of the character's design. And your vector points are very well placed.
The background is just amazing with all it's details and textures. And the overall blue tone on the background makes the character less alienated in terms of colors.
