Crypto Exchange Hotbit is Shutting Down After Five Years

Hong Kong-based crypto exchange Hotbit announced Monday that it would shut down permanently on May 22nd by 04:00 UTC. The firm urged users to withdraw their assets within the next month.

Why Is Hotbit Closing?

After running for five years and four months, the centralized exchange will be closing down. It cited three primary reasons for the closure. The first reason was related to a forced operation suspension that the company faced in August 2022. A year earlier, a then-Hotbit official got involved in a crypto project. Law enforcement authorities believed this project was guilty of criminal offenses. 

Although Hotbit exonerated itself from the matter and the official in question had left the company, law enforcement authorities seized some funds from the exchange and called some of its officials to court. This caused Hotbit to suspend operations for some time.

Hotbit also referenced the collapse and depreciating trust for centralized exchanges as one of its reasons for permanent closure. Prominent among these exchanges is the infamous FTX. The USDC depeg that occurred amid the banks’ failure contributed to the mass cash outflow from centralized exchanges that occurred amid the banks’ failure. Hotbit admits to being affected by the outflows.

The crypto exchange added that the deteriorating engagement with centralized exchanges will lead the industry to “either embrace the regulation or become more decentralized.”

Hotbit’s final reason was the increasing cyber attacks from bad market players, which has birthed significant financial losses.

Will Hotbit Allow Withdrawals?

The company emphatically stated in its announcement that users should withdraw their assets from the platform before June 21st, 2023 However, it appears several users are having difficulty pulling their money out of the exchange since the announcement was made.

“How do we withdraw when the withdrawal option has been disabled? Please enable withdrawal so we can withdraw our assets,” a user stated on Twitter.

Another user shared a screenshot of the Hotbit withdrawal page showing that the withdrawal feature is defunct. The exchange is yet to comment on this withdrawal difficulty faced by some or all of its five million users.