In an announcement, the exchange said that its operating conditions have deteriorated since a former member of its team was subjected to an investigation back in August 2022. According to the exchange, the probe forced them to stop their business for weeks.
In addition, Hotbit also cited various incidents within the crypto space as contributors to its decline. The exchange cited the FTX exchange collapse and the banking crises that caused the USD Coin (USDC) depegging incident as reasons for its deteriorating cash flow. Hotbit said that the incidents resulted in a continuous outflow of funds from centralized exchanges.
Apart from these, the Hotbit team also believes that centralized exchanges are becoming “increasingly cumbersome” and are “unlikely to meet long-term trends.” The exchange said that the only options are to either become more decentralized or embrace regulation.
The exchange also blamed the repeated cyber attacks and the exploitation of “project defects by malicious users” as reasons for its downfall.
As the announcement came, several members of the community reported that they are unable to withdraw their funds from the exchange.
Crypto exchange Hotbit announced that it will be stopping all of its operations starting on May 22. The exchange asked all of its users to withdraw their funds before June 21, 04:00 UTC.
How do we withdraw when the withdrawal option has been disabled? Please enable withdrawal so we can withdraw our assets https://t.co/gXlGpR4hOV
— laith (@laith2762) May 22, 2023
Some also warned community members of phishing links that pretend to be the official Hotbit exchange in Google.
While Hotbit is taking its bow, other exchanges are still carrying on and are launching campaigns to fix the issues in the crypto space. Crypto exchange Coinbase recently published a campaign that says “update the system.” On the other hand, OKX took it a step further and wants to “rewrite the system” entirely.