- Hotbit has suspended trading, deposits, and withdrawals after authorities froze funds.
- Some Hotbit senior executives were subpoenaed in July over an alleged criminal matter.
- The suspension is for an uncertain period of time, but Hotbit promised that customers’ funds are safe with them.
After facing a criminal probe by authorities, the Shanghai-based crypto exchange, Hotbit, has ceased trading, deposits, and withdrawals with no estimated restoration time. During the alleged probe, the authorities froze some of Hotbit’s funds over suspected violations of criminal law.
The decision to halt services was made in response to reports that a former manager, who Hotbit stated resigned in April, was involved in actions that were “against Hotbit’s organizational values,” according to a statement released recently.
This statement also stated that some of the exchange’s senior executives were summoned late last month and are currently cooperating with the authorities’ investigation. The company also asserted that other members of Hotbit’s management and the platform itself were not involved in the suspected illegalities under investigation.
Although Hotbit did not disclose which jurisdictional body is investigating its executives or the overall value of the frozen funds, they appear unlikely to be from the US.
With claims that the customers’ funds are safe with them, Hotbit stated that unfulfilled open orders on the platform will be invalidated before services commence to avoid potential losses, and all leveraged ETF holdings will be forcefully liquidated.
During the freeze, users will continue to earn revenue from their “investment products.” Finally, they will be given a compensation plan after Hotbit’s website resumes operation.
The exchange, which has so far accumulated over 7,000,000 registered members from over 210 countries and regions globally, tweeted after releasing the statement stating that they are “constantly applying for the release of the frozen assets.”
In a similar incident last year, the platform suspended services for roughly a week when a cyberattack knocked off several of its operations. The fraudsters also attempted to get access to the exchange’s wallets.