Crypto exchange Hotbit announces its closure after five years of operation

Platform users can withdraw their assets until June 21

22.05.2023 - 08:20

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What’s new? On May 22, at 04:00 UTC, centralized crypto exchange (CEX) Hotbit stopped all transactions and urged users to withdraw their remaining assets by June 21, 04:00 UTC. According to a statement on the website, the platform had been operating for 5 years and 4 months, but it is time “to say thank you and take a bow.” Hotbit representatives said that the decision to close was based on three reasons, among them the deterioration of operating conditions and the change in the crypto industry trend.

Hotbit’s statement

What else does the statement say? Since Hotbit suspended operations due to the investigation into a former platform employee in August 2022, the industry has experienced a number of incidents, including the collapse of the FTX exchange and the banking crises that caused the USDC stablecoin to depeg from the dollar, which led to outflows from CEX and deteriorating cash flow.

In addition, the collapse of large centralized institutions has left the industry facing the choice of accepting regulation or becoming decentralized. The Hotbit team believes that CEXs are becoming increasingly difficult to manage, especially in terms of compliance over the long term.

According to the statement, “Hotbit was the first exchange to list numerous emerging assets, including SHIB, KSM, GRIN and so on, and was the first to offer staking services starting from ATOM, as well as the first to conduct Defi mining business using Compound.” However, because of the uncertainty in the industry, a variety of offerings also contain many risks.

For example, Hotbit has faced numerous problems, including cyberattacks and exploits, resulting in significant losses. The Hotbit team believes that the operation model for supporting diverse assets is unsustainable in terms of risk management.

In February, the Finnish exchange LocalBitcoins announced its closure due to crypto winter after 10 years of operation. Clients of the platform can withdraw assets within 12 months.

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