Amid the uncertainty in the industry, popular crypto exchange, Hotbit has fully halted operations on its network. The exchange in its Monday announcement confirmed the development. In the post, Hotbit advised all its users to start withdrawing their assets.
Hotbit clarified that its decision to halt all its operations commences with immediate effect. However, it emphasized that users who have assets on its network will be given a June 21 ultimatum to withdraw all their funds. This thus means they can now begin to withdraw their assets till the given deadline.
According to Hotbit, the recent developments in the crypto market have significantly affected its operations. It cited the implication of the recent FTX crash and the crisis in the banking system as contributors to its struggle. Recall that the contagion of the FTX collapse last year, worsened the situation in the market, condemning numerous crypto firms to financial crises. Hotbit also talked about the banking crisis which caused the depegging of USD coin. These developments, according to the exchange, caused significant outflow of funds from centralized exchanges.
Hotbit believes centralized exchanges are losing their relevance
Hotbit added that the ongoing developments in the industry have continued to reduce the relevance of centralized exchanges. According to its team, centralized exchanges are becoming complicated and seems unlikely to meet the evolving demands of users. The only option for centralized exchanges, according to Hotbit, is to comply with regulations or become decentralized.
Additionally, Hotbit said the ongoing probe of a former member of its team also contributed to the decision to shut down. Recall that law enforcement agencies have since 2022 been investigating the former team member for allegedly involving in a project that violates criminal laws. The development led to the freezing of some of Hotbit funds, thereby affecting its operations. Amid the crisis, Hotbit halted deposit, withdrawal and funding offerings on its network. However, it assures users of the safety of their funds at that time. Now, Hotbit is saying the development also contributed to its resolution to fully close down its services.
Hotbit also blamed the rising exploitation of projects for its downfall. Recall that the crypto industry has been ravaged by numerous cases of hacks in the past few months. In March, Euler Finance endured an exploitation that led to the loss of $197 million worth of assets. According to findings, the attacker looted 8.87 million $DAI, 34 million $USDC and about 85.8k $stETH from the platform. Similarly, Bonq suffered the same fate, losing $120 million to the attack on its network. More so, popular crypto exchange GDAC was not even spared as it also endured a $13 million exploit on its hot wallet. The funds stolen represents 23% of its entire holdings. So, Hotbit said the rise in the exploitations affected its business.