Hotbit, one of the fastest-growing crypto exchanges, commented that centralized exchanges are becoming progressively burdensome and emphasized that they are unlikely to align with long-term trends. Hotbit declared to cease all of its operations effective May 22. The exchange has asked its users to withdraw their funds latest by June 21, 4:00 AM UTC.
In an announcement, the exchange stated that its operating conditions have worsened, following an investigation of a former team member in August 2022. According to the exchange, the results of this investigation led to the shutting down of services provided by Hotbit for several weeks.
Moreover, Hotbit imputed its downfall to multiple incidents occurring within the crypto industry. The exchange distinctly emphasized the collapse of FTX and the banking crisis that ultimately led to the de-pegging of the USD coin (USDC) affecting its cash flow negatively. These incidents resulted in the constant outflow of funds from centralized exchanges.
According to the Hotbit team, centralized exchanges are proving to be increasingly burdensome and are not anticipated to align with long-term trends. The exchange conveyed that the only viable option is either to embrace regulatory measures or adopt a more decentralized approach. The exchange ascribed its downfall to recurring cyberattacks and the exploitation of “project defects by malicious users.”
Following the announcement many members reported difficulties in withdrawing their funds from the exchange while others were forewarned against phishing links posing as the official Hotbit exchange on Google. While Hotbit winds down, other exchanges will continue their operations with new initiatives to target various issues in the crypto industry.