The Hotbit cryptocurrency exchange revealed that it will be shutting down all of its operations starting on May 22. The exchange has requested that its users withdraw their funds before June 21, 04:00 UTC, as it suspends trading, withdrawals, and deposits.
In an official statement, Hotbit expressed gratitude to its 5 million users who had participated in the exchange’s journey over the past 5 years and 4 months. The decision comes after the exchange faced a series of setbacks, including criminal investigations and external crises within the crypto industry.
Hotbit blamed several factors for its closing down
Hotbit cited the investigation of a former team member in August 2022 as a significant turning point. According to the exchange, the probe forced them to halt business operations for several weeks, severely impacting their overall functioning.
It's time to take a bow 🙇
For 5 years and 4 months, the Hotbit team has been proud to participate in a wonderful crypto show with 5 million users. However, it is with great regret that we have made the decision to stop all CEX operations from May 22, UTC 04:00. We kindly ask all…
— Hotbit News (@Hotbit_news) May 22, 2023
Repeated cyberattacks and the exploitation of project defects by malicious users, combined with the industry’s uncertainty, had also caused significant losses for the exchange. Hotbit admitted that its operation model, which aimed to support a diverse range of assets, had become unsustainable from a risk management standpoint.
The demise of the once-reputable FTX exchange and the banking crises that resulted in the USD Coin (USDC) de-pegging incident were also cited by Hotbit as contributing factors to its declining cash flow. According to the company, these incidents caused a steady outflow of money from centralized exchanges, including itself.
Additionally, the Hong Kong-based cryptocurrency exchange expressed concerns over the viability of centralized exchanges in the long term. The trading platform believed that centralized exchanges were becoming “increasingly cumbersome” and unlikely to align with the evolving trends of the crypto industry. It emphasized that the options ahead were either to embrace regulation or adopt a more decentralized approach.
The news of Hotbit’s closure has sparked concern among its user community, with several members reporting difficulties withdrawing their funds from the exchange. Hotbit, while not as prominent as exchanges like Binance and Coinbase, had established itself as a notable player in the cryptocurrency market.
The app stops working and you are saying we should withdraw the funds before 22 June.. Make hotbit works in order to withdraw our funds … https://t.co/Q7UVuFp8Yt pic.twitter.com/1UliI4Ha0S
— Crypto_ (@Sharon_Crypto07) May 22, 2023
Despite the challenges faced, Hotbit still believes in a bright future for crypto innovation and said, “Some members of the team will continue to fight for it.”