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Hotbit, a prominent cryptocurrency exchange, has made a significant announcement, stating that it will suspend all operations effective May 22. The platform has strongly advised users to initiate fund withdrawals before June 21, specifically by 4:00 am UTC. The exchange cited deteriorating operating conditions, which can be traced back to an investigation involving a former team member in August 2022. This investigation compelled Hotbit to temporarily cease its business activities for several weeks.
It's time to take a bow 🙇
— Hotbit News (@Hotbit_news) May 22, 2023
For 5 years and 4 months, the Hotbit team has been proud to participate in a wonderful crypto show with 5 million users. However, it is with great regret that we have made the decision to stop all CEX operations from May 22, UTC 04:00. We kindly ask all…
The Reasons Behind Hotbit’s Downfall
Hotbit emphasized that several incidents within the cryptocurrency industry have played a significant role in its decline. Specifically, the exchange pointed to the collapse of FTX and the banking crises that triggered the USD Coin (USDC) de-pegging event. According to Hotbit, these events have significantly impacted its cash flow, leading to a continuous outflow of funds from centralized exchanges (CEX).
According to the Hotbit team, centralized exchanges are increasingly burdensome and unlikely to align with long-term industry trends. As a result, the crypto exchange emphasized that there are two viable options: either transitioning towards a more decentralized approach or embracing regulatory measures. Additionally, Hotbit attributed its downfall to recurrent cyberattacks and the exploitation of “project defects by malicious users,” further underscoring its challenges.
Following the announcement, numerous members of the community voiced their inability to withdraw funds from the crypto exchange. Additionally, several community members issued warnings about phishing links circulating on Google, masquerading as the official Hotbit exchange, urging others to exercise caution and avoid falling victim to such fraudulent attempts.
As Hotbit bids farewell, other exchanges continue their operations, actively engaging in initiatives to address challenges within the crypto industry. Notably, cryptocurrency exchange Coinbase recently launched a campaign focused on “updating the system.” On the other hand, OKX has taken a more ambitious approach, aiming to completely “rewrite the system.” These exchanges are actively seeking solutions and trying to improve the crypto ecosystem’s overall state.