dailycoin.com
- Hotbit has shut down all of its exchange services.
- The exchange cited changing the crypto scene after the FTX blowup as one of the reasons for the closure.
- Hotbit had a strong opinion about the future of centralized exchanges.
Centralized crypto exchanges (CEXs) have had perhaps the worst time in the history of crypto. After FTX blew up in November last year, other exchanges started facing scrutiny from regulators.
One of these exchanges, Hotbit, announced it is abruptly shutting down operations.
Hotbit Shuts Down Exchange
Hotbit, operating for over five years, has decided to close its doors without warning.
On Monday, the exchange released an official article explaining the reasons for the unexpected closure of its business.
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…
Hotbit cited the FTX blowup in November, along with the bank crises causing the USDC depeg in April, as one of the reasons why it decided to shut down. Hotbit also said that it suspended operations for several weeks in August 2022 due to a former Hotbit management employee being investigated by law enforcement.
On top of that, Hotbit also pointed to the rapidly changing crypto scene, especially concerning crypto regulations. The exchange revealed that centralized exchanges are becoming “cumbersome” that are “unlikely to meet long-term trends.”
“The successive collapse of large centralized institutions has led the industry to gradually in two ways: either embrace the regulation or become more decentralized. The Hotbit team believes that CEXs 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.”
Hotbit also added that it had suffered “numerous problems” over the years, including “repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses.”
Hotbit no longer operates as of May 22 and has asked its users to withdraw their funds by June 21.
On the Flipside
- It’s unclear why Hotbit decided to shut down its exchange so rapidly. Law enforcement may be involved.
Why This Matters
Users who have funds on Hotbit should withdraw them as soon as possible.
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