China-headquartered digitalย currency exchange, Hotbit, stated on May 22 it had made the decision to halt โall cex operations.โ The cryptocurrency exchange pointed to the โcontinuous outflows of funds from cex [centralized exchange] usersโ as one of the numerous factors that forced Hotbit to stop operations.
The Cryptocurrency Industryโs โDeteriorating Conditionsโ
The Asian digitalย currency exchange, Hotbit, recently stated it was shutting down the platform owingย to what it characterized as โdeteriorating conditionsโ in the cryptocurrency industry. Reportsย by a statement announced by the exchange on May 22, these conditions have, asย aย result, resulted in the โcontinuous outflows of funds from cex [centralized exchange] users, including Hotbit, and deteriorating cash flow.โ
Alongย with dealing with financialย 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 thinksย 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
Regardlessย 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 โof project defects by malicious usersโ made its business model an unsustainable one. Reportsย by the team, such incidents are some of the reasons why the cryptocurrency exchange has incurred โ wholeย lotย of losses.
Inย theย meantime, the statement likewise pointedย outย that Hotbitโs decision to halt cex operations came less than a year after the exchangeโs management team was forced to โsuspend operations for plentyย of weeks owingย to the investigation in August 2022.โ Accordingย to Bitcoin.com News in 2022, Hotbit was forced to make this decision after seeing law enforcement freeze the cryptocurrency exchangeโs funds.
