Hotbit, a cryptocurrency exchange based in Shanghai, has announced that it will be ceasing all operations from May 22 onwards.
The platform’s team believes that centralized exchanges are becoming too cumbersome and challenging to comply with, whether in terms of compliance or decentralization, and are unlikely to meet long-term trends. Hotbit also explained that the successive collapses of large centralized institutions have prompted the industry to either embrace regulation or become more decentralized, leading to a change in trend in the crypto industry that has influenced its decision to close down.
- Hotbit has asked its users to withdraw any remaining assets before June 21st this year and cited various reasons for its decision. The platform stated that operating conditions had deteriorated due to a series of crises, including the collapse of FTX and bank crises causing USDC off-peg incidents.
- In addition, there have been continuous outflows of funds from CEX users, including Hotbit, which have contributed to the decision to shut down. The platform also noted that it had suffered repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses. Therefore, Hotbit’s current operating model of supporting a diverse range of assets is unsustainable from a risk management standpoint.
- This announcement comes almost a year after the platform halted its trading, withdrawal, and deposits due to law enforcement authorities freezing some of its assets in connection to the alleged criminal misconduct of a former employee.