Hotbit Halts CEX Operations Due to Cryptocurrency Industrys Deteriorating Conditions

Hotbit Halts CEX Operations Due to Cryptocurrency Industrys Deteriorating Conditions


Hotbit, a China-based cryptocurrency exchange, has announced the suspension of all centralized exchange operations due to deteriorating conditions in the crypto industry, including continuous outflows of funds from users and reduced cash flow.

China-headquartered digital currency exchange, Hotbit, stated on May 22 it had made the decision to halt “all cex operations.” The cryptocurrency exchange pointed to the “continuous outflows of funds from cex [centralized exchange] users” as one of the numerous factors that forced Hotbit to stop operations.

The Cryptocurrency Industry’s ‘Deteriorating Conditions’

The Asian digital currency exchange, Hotbit, recently stated it was shutting down the platform owing to what it characterized as “deteriorating conditions” in the cryptocurrency industry. Reports by a statement announced by the exchange on May 22, these conditions have, as a result, resulted in the “continuous outflows of funds from cex [centralized exchange] users, including Hotbit, and deteriorating cash flow.”

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Along with dealing with financial resources outflows and reduced cash flow, the Hotbit team claimed in the statement that the constant upheavals in the cryptocurrency industry are making it more difficult to operate a cex. The Hotibit team said:

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 thinks that centralized exchanges (cex) are becoming increasingly cumbersome, with highly complex and interconnected enterprises that are difficult to comply with, whether for compliance or decentralization and are unlikely to meet longstanding trends.

An Unsustainable Business Model

Regardless of being one of the 1st exchanges to list emerging assets such as SHIB and GRIN, the Hotbit management team claimed in the statement that cyber attacks suffered in the past and the exploitation “of project defects by malicious users” made its business model an unsustainable one. Reports by the team, such incidents are some of the reasons why the cryptocurrency exchange has incurred “ whole lot of losses.

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In the meantime, the statement likewise pointed out that Hotbit’s decision to halt cex operations came less than a year after the exchange’s management team was forced to “suspend operations for plenty of weeks owing to the investigation in August 2022.” According to Bitcoin.com News in 2022, Hotbit was forced to make this decision after seeing law enforcement freeze the cryptocurrency exchange’s funds.

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