Hong Kong-based cryptocurrency trading platform Hotbit announced today that it will stop all operations on May 22, 2023.
In a new announcement, Hotbit, which had 5 million users, cites deteriorating operating conditions, crypto industry changes, and risk management concerns as their motives for shutting down.
“This decision is based on three reasons:
- Firstly, the deterioration of the operating conditions. After the Hotbit management team was forced to suspend operations for several weeks due to the investigation in August 2022, the industry has experienced a series of crises, including the collapse of FTX, bank crises causing USDC off-peg incidents, resulting in continuous outflows of funds from CEX [centralized exchange] users, including Hotbit, and deteriorating cash flow.
- Secondly, the change in the crypto industry trend. The successive collapse of large centralized institutions has led the industry to gradually in two ways: either embrace the regulation or become more decentralized. The Hotbit team believes that centralized exchanges are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization, and are unlikely to meet long-term trends.
- Since its beginning, Hotbit has been characterized by providing a rich variety of assets and value-added methods… However, due to the industry’s uncertainty, various opportunities also contain many risks. Hotbit has also suffered numerous problems, such as repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses. Therefore, the Hotbit team believes that the operation model of supporting a diverse range of assets is unsustainable from a risk management standpoint.”
Hotbit users have been asked to withdraw their assets by June 21, 2023.
Earlier this month, regulatory concerns forced fellow crypto exchange Bittrex to shut down after the U.S. Securities and Exchange Commission (SEC) charged Bittrex and its co-founder and former CEO William Shihara with operating an unregistered national securities exchange, broker, and clearing agency.
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