The crypto exchange, Hotbit, is closing down its main platform as a response to a criminal investigation launched in August, which led to the freezing of Hotbit’s operational funds. Consequently, the exchange had already suspended deposits, withdrawals, and live trade for several weeks.
Hotbit, expressed pride in being part of the crypto industry for five years and serving 5 million users, in a notice on its website. However, they regretfully announced the decision to cease all CEX operations starting from May 22, 2023.
Hotbit acknowledged that its cash flow deteriorated further following the investigation. In a blog post, the company attributed this to the collapse of FTX and the banking crises that caused USDC’s temporary de-pegging earlier this year. Hotbit also highlighted an increase in outflows from centralized exchanges as a contributing factor.
Hotbit claims to be registered in Estonia and Hong Kong, but it operates from Shanghai and Taipei. According to CoinGecko, the platform facilitated approximately $109 million in cryptocurrency trades within the past 24 hours. Despite reaching out for comment, Hotbit did not respond to Blockworks’ request at the time of press. Users have been asked to withdraw their assets before June 21.
The Hotbit team holds the belief that centralized exchanges are becoming more burdensome due to their complex and interconnected nature, making compliance and decentralization challenging. They also anticipate that these exchanges may not align well with long-term trends.
Hotbit’s closure coincides with Bittrex’s bankruptcy filing, citing challenges in the current US regulatory and economic landscape. The recent collapses of FTX and other centralized exchanges have fueled skepticism regarding centrally-operated crypto custody and trading. This has sparked a call for individuals to hold their own crypto or utilize decentralized exchanges.
