Hong Kong-based cryptocurrency trading platform Hotbit announced today that it will cease all operations on May 22, 2023.
In a new announcement, Hotbit, which had 5 million users, cites deteriorating business conditions, changes in the crypto industry and concerns about risk management as their motives for shutting down.
“This decision is based on three reasons:
- First, the deterioration of operating conditions. After Hotbit’s 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, banking crises that caused incidents with USDC, resulting in a continuous outflow of funds from CEX [centralized exchange] users, including Hotbit, and deteriorating cash flow.
- Second, the change in the trend in the crypto industry. The successive collapse of large centralized institutions has led the industry to gradually evolve in one of two ways: embrace 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 meet, whether for compliance or decentralization, and are unlikely to meet long-term trends.
- Since its inception, Hotbit has been characterized by offering a rich variety of value-added assets and methods… However, due to the uncertainty in the industry, various opportunities also carry many risks. Hotbit has also faced numerous issues 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 business model of supporting a wide range of assets is unsustainable from a risk management perspective.
Hotbit users have been asked to withdraw their credits by June 21, 2023.
Earlier this month, regulatory concerns forced fellow crypto exchange Bittrex to close after the U.S. Securities and Exchange Commission (SEC) charged Bittrex and its co-founder and former CEO William Shihara with running an unregistered national stock exchange, broker and clearing house.
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