Key takeaways:
- Hotbit, a cryptocurrency exchange, announced that it will cease all operations on May 22 at 04:00 UTC. Users were advised to withdraw their assets prior to June 21.
- Hotbit expressed concerns about the future of centralized exchanges, stating that the trajectory of the crypto industry has made it uncertain.
Hotbit, a well-known centralized cryptocurrency exchange (CEX), has announced the suspension of its business operations after serving for five years. The decision, disclosed on May 22, 2023, was attributed to worsening operating conditions, including reduced cash flow, changing crypto sentiment, and stricter regulatory measures.
The Hotbit team claims to have been honoured to take part in a spectacular crypto exhibit with 5 million users for five years and eleven months. However, “we regretfully announce that as of [May 22, 2023], all CEX activities will cease”, according to a statement on Hotbit’s website.
The decision to suspend operations at Hotbit is influenced by three main factors. Firstly, there has been a notable deterioration in the operating conditions of the exchange. After undergoing an investigation that led to a temporary suspension of operations in August 2022, the industry experienced a series of crises, including the collapse of FTX and bank-related incidents that led to USDC off-peg incidents.
These events resulted in the outflow of funds from users of centralized exchanges, including Hotbit, and subsequently led to a decline in cash flow.
Hotbit’s team additionally holds the view that centralized exchanges are becoming more burdensome and are unlikely to align with long-term industry trends. The exchange stated that the two available alternatives are either embracing regulation or embracing decentralization.
Furthermore, Hotbit attributed its downfall to recurrent cyberattacks and the exploitation of vulnerabilities within projects by malicious users.
Hotbit’s website states that it holds licences in Estonia and Hong Kong. But Hotbit made the difficult decision to close the business. In Hong Kong, a new licencing regime for service providers of virtual assets will take effect on June 1. a decision that aims to make it possible for average investors to trade key cryptocurrencies.
Millions of Hotbit customers have been asked to remove their assets from the system, and the company has promised to support withdrawals up until June 21, 2023. All accounts will be permanently closed after this date. Users are recommended to act right away in order to guarantee the secure return of their assets.
“With so many tears and joys, our concert has come to an end. We’d want to take a bow right now and say thank you. Some of us will continue to fight for it because we still have faith in the promising future of crypto innovation”, Hotbit reiterated.
