- Cryptocurrency exchange Hotbit announced the closure of its operations.
- Starting from May 22, 04:00 UTC, the CEX will close down its operations.
- Hotbit also urged users to withdraw all their assets before June 21.
Hotbit, a prominent player in the cryptocurrency industry with a history of 5 years and 4 months, has recently announced the halting of its CEX operations. The platform had amassed a substantial user base of 5 million during its tenure.
According to the announcement, starting May 22, UTC 04:00, all CEX operations of Hotbit will come to an end. The exchange also urged the users to withdraw their assets before June 21, UTC 04:00. Hotbit mentioned three key reasons as to why it is ceasing its CEX operations.
One of the primary factors contributing to this decision is the deterioration of operating conditions. In August 2022, an investigation compelled Hotbit’s management team to temporarily suspend operations for several weeks.
The cryptocurrency industry has also experienced a series of crises, including the collapse of FTX and banking crises that resulted in off-peg events for USDC. These circumstances collectively led to a steady outflow of funds from users of Hotbit.
The shifting trend within the cryptocurrency realm is another major element that Hotbit has identified. The sector has had to adjust in one of two ways as a result of the repeated failures of huge centralized institutions: either by embracing restrictions or by pursuing greater decentralization.
The Hotbit team thinks that centralized exchanges are becoming more and more burdensome since they have complex and interwoven corporate structures that make compliance and decentralization difficult. They believe that it is doubtful that these exchanges will follow long-term business trends.
Hotbit has a reputation for providing a wide variety of resources and value-added services. The exchange suffered significant losses as a result of persistent cyberattacks and hostile project vulnerability exploitation. As a result, the Hotbit team thinks that, from the perspective of risk management, the operational model supporting a wide variety of assets is unsustainable.
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