Hotbit, a prominent name in the cryptocurrency industry with over 5 years and 4 months of history, has recently surprised the market by announcing the suspension of its CEX operations. The exchange had managed to accumulate an impressive user base of 5 million throughout its operational tenure.
It's time to take a bow 🙇
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 News (@Hotbit_news) May 22, 2023
According to a recent tweet from Hotbit’s official Twitter account starting from May 22, UTC 04:00, all CEX operations on the Hotbit platform will be brought to a halt. The exchange has also urged its users to withdraw their assets before June 21, UTC 04:00. Hotbit cited three key factors as the rationale behind this unexpected decision.
Among the primary reasons leading to this move is the deterioration of operating conditions. In August 2022, Hotbit’s management team was compelled to temporarily suspend operations for several weeks due to an ongoing investigation.
Additionally, the cryptocurrency industry has been rocked by a series of crises, including the collapse of FTX and banking crises resulting in off-peg events for USDC. These challenging circumstances have resulted in a steady outflow of funds from Hotbit’s user base.
Hotbit has also identified a notable shift within the cryptocurrency landscape. The repeated failures of major centralized institutions have forced the industry to confront a choice between embracing stricter regulations or pursuing greater decentralization. The Hotbit team is of the belief that centralized exchanges are increasingly burdensome, as they grapple with complex and intertwined corporate structures that hinder compliance and decentralization efforts. They express doubt that such exchanges will align with long-term business trends.
Furthermore, Hotbit’s reputation for offering a wide range of resources and value-added services has been marred by significant losses due to persistent cyberattacks and vulnerabilities exploited by malicious actors. Consequently, the Hotbit team considers the operational model supporting a diverse array of assets as unsustainable from a risk management perspective.