Hotbit has announced that it will cease operations on May 22, 2023. The cryptocurrency exchange urged users to withdraw their funds on or before June 21, 2023, 4:00 UTC.
Hotbit cited worsening operating conditions as the reason for its closure. The exchange’s woes started when law enforcement authorities began investigating a former team member in August 2022. This investigation caused disruptions to the business for several weeks; the authorities froze some of the exchange’s funds. During that period, Hotbit suspended trading, deposit, withdrawal, and funding functions. Since then, several Hotbit senior managers have been subpoenaed by law enforcement.
Hotbit also attributed its decision to close its business to the turn of events in the crypto industry. The exchange claimed that incidents like FTX’s collapse, bank crises, and the depegging of USDC being off-peg led to continuous outflows of funds from Centralized Exchanges (CEX) and decreased cash flow.
According to Hotbit, CEXes are becoming increasingly cumbersome to operate due to their complex and interconnected nature, making compliance and decentralization challenging. The exchange noted that CEXes do not align with long-term trends because the collapse of centralized institutions had pushed the crypto industry in two directions: embracing regulation or moving towards decentralization.
Hotbit also highlighted other issues it has faced that resulted in significant financial losses. These issues include frequent cyber attacks and malicious users exploiting project flaws.
Following Hotbit’s announcement, some community members reported difficulties withdrawing funds from the exchange. Others alerted other users about phishing links posing as the official Hotbit exchange on Google.
How do we withdraw when the withdrawal option has been disabled? Please enable withdrawal so we can withdraw our assets https://t.co/gXlGpR4hOV
— laith (@laith2762) May 22, 2023
While Hotbit shuts down, other centralized cryptocurrency exchanges, such as Coinbase and OKX, continue their operations. Both exchanges recently launched campaigns to revamp the global financial system, with Coinbase calling for an update to the system. In contrast, OKX is campaigning for a total overhauling of the system and transition to Web3, and complete decentralization.
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