Hotbit Shutters Crypto Exchange, Urges Users to Withdraw Funds

Crypto exchange Hotbit has halted operations, citing a litany of issues and suggesting that centralized exchanges are unlikely to be viable in the long term.

In a statement posted on the company’s website, Hotbit said its operations would cease in the early hours of May 22 and required users to withdraw their remaining assets by June 21 at 4 a.m. UTC.

“We want to say thank you and salute now,” the team wrote in the post. “We still believe in a bright future for crypto innovation and some of us will still fight for it.”

The platform, which claims to have served 5 million users, attributed the move to deteriorating operating conditions, compounded by a weeks-long enforced suspension last August when a former employee was placed under investigation.

Hotbit also said the direction of the crypto industry leaves the future of centralized exchanges uncertain. With the collapse of FTX and other major crypto institutions, the industry was left with a choice between regulation or further decentralization, the company said.

“The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to adhere to, whether for compliance or decentralization, and are unlikely to respond to long-term trends,” the post said.

The firm also pointed to other issues, including high risk on some assets and repeated cyberattacks, which made its model of offering a wide range of investments “unsustainable”.

Tough time for centralized exchanges

Founded in January 2018, Hotbit is currently based in Shanghai and Taipei, according to his website.

It served users from more than 170 countries, most of which were based outside of China, the platform said.

Its demise comes the same month that other centralized exchange Bittrex filed for bankruptcy, saying it was not “economically viable” to continue to run the business in “the current regulatory and economic environment in the United States. “.

The collapses of FTX and other high profile centralized exchanges have increased skepticism towards centralized forms of crypto custody and trading, prompting more people to hold their own crypto or trade on exchanges. decentralized.

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