Hotbit, a cryptocurrency exchange, has recently announced its closure and urged its customers to withdraw all their cryptocurrencies from the platform by mid-June.
The decision to shut down the exchange was influenced by a series of bankruptcies among crypto trading platforms and banks, as stated on Hotbit’s official website. The exchange has already ceased its trading operations and is requesting users to withdraw their assets before June 21.
In a press release, Hotbit attributed its decision to negative events in recent months and a continual outflow of funds from the platform.
The exchange cited “numerous problems,” including repeated cyberattacks and exploitation of system vulnerabilities, resulting in significant losses. However, the exact extent of the exchange’s losses due to security breaches and hacker attacks remains undisclosed.
Consequently, the Hotbit team believes that their current model of supporting multiple tokens is unsustainable in terms of risk management, leading to the decision to cease operations.
Additionally, Hotbit acknowledged the fierce competition in the market, stating that centralized marketplaces are becoming increasingly complex to develop while complying with compliance requirements.
Hotbit had previously halted its operations in August 2022, citing a law enforcement investigation. During that period, the exchange temporarily suspended cryptocurrency withdrawals and deposits due to an investigation involving a former employee’s involvement in a project that violated local laws. However, the details regarding the specific employee and project were not disclosed by the exchange.
Furthermore, Hotbit also ceased trading, explaining that it was prompted by a law enforcement decision to freeze a portion of the exchange’s funds as part of an ongoing investigation. However, Hotbit did not provide further clarification on who initiated the asset freeze and where it occurred.
Established in 2017, Hotbit served millions of customers, according to various estimates. The exchange participated in five investment rounds since 2021, as reported by Crunchbase.