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Сrypto exchange Hotbit is shutting down due to unfavorable market trends and deteriorating operating conditions, making it impossible to remain in business. Hotbit users are advised to withdraw their assets from the platform before June 21.
Hotbit, a Hong Kong-based bitcoin (BTC) trading venue that suspended customer deposits and withdrawals for several weeks in August 2022 due to law enforcement investigations on one of its execs is finally closing its platform.
According to a May 22 announcement by the 5-year-old crypto exchange, which claims to have five million customers across the globe, its decision to completely shutter operations stems from several factors, including increased scrutiny from law enforcement authorities.
Hotbit also claims that the disgraced Sam Bankman-Fried’s FTX scandal, which saw countless crypto traders and investors lose their hard-earned money last year, has caused an increased flow of funds from centralized exchanges (CEXs), including itself, with a good number of investors now adopting self custody.
Centralized institutions becoming unstainable
It’s no news that several centralized crypto market participants, from heavy hitters such as Three Arrows Capital (3AC), and Celsius, down to even the little-known projects, have gone bankrupt recently.
Just In: Hotbit, an exchange with 5 million users, announced the suspension of operations today, and users need to withdraw their remaining assets before June 21; the core reason is the deterioration of the operating conditions, Hotbit management team was forced to suspend…
— Wu Blockchain (@WuBlockchain) May 22, 2023
Hotbit says these unfortunate incidents are gradually forcing the crypto industry to either embrace regulation or ply the decentralization route, and both options seem too cumbersome for the exchange.
“The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization and are unlikely to meet long-term trends.”
the Hotbit team
Additionally, the exchange has cited increased risk management burdens. It stated that the increasing cyber-attack incidents have made it quite unstainable for it to keep supporting a diverse range of crypto assets, which has been part of its business model over the years.
Hotbit users are advised to withdraw all their funds from the exchange before UTC 04:00 on Jun. 21, 2023.