- Hotbit has shut down all of its exchange services.
- The exchange cited changing the cryptocurrency scene after the FTXย Tradingย Ltd blowup as one of the reasons for the closure.
- Hotbit had a strong opinion about futureย ofย the centralized exchanges.
Centralized cryptocurrency exchanges (CEXs) have had perhaps the worst time in the history of cryptocurrency. After FTXย Tradingย Ltd blew up in November aย yearย ago, other exchanges started facing scrutiny from regulators.
1 of these exchanges, Hotbit, announced it is abruptly shutting down operations.
Hotbit Shuts Down Exchange
Hotbit, operating for over 5 years, has decided to close its doors without warning.
On Monday, the exchange released an official post introducingย the reasons for the unexpected closure of its business.
Hotbit cited the FTXย Tradingย Ltd blowup in November, along with the bank crises causing the USDC depeg in April, as one of the reasons why it decided to shut down. Hotbit likewise stated that it stopped operations for plentyย of weeks in August 2022 owingย to a previous Hotbit management employee being investigated by law enforcement.
Inย addition of that, Hotbit likewise pointed to the rapidly changing cryptocurrency scene, especially concerning cryptocurrency regulations. The exchange revealed that centralized exchanges are becoming โcumbersomeโ that are โunlikely to meet longstanding trends.โ
โThe 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 CEXs 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.โ
Hotbit likewise alsoย mentionedย that it had suffered โ numerous problemsโ over the years, including โrepeated cyber attacks and the exploitation of project defects by malicious users, resulting in wholeย lotย of losses.โ
Hotbit no longer operates as of May 22 and has requested its users to withdraw their funds by June 21.
The other side
- Itโs unclear why Hotbit decided to shut down its exchange so rapidly. Law enforcement couldย be involved.
Why This Matters
Users who have funds on Hotbit should withdraw them as soon as possible.ย
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