Cryptocurrency exchange Hotbit has announced its closure, with operations on the platform being halted at 7:00 am on May 22. In their statement, the exchange’s team has requested all users to withdraw their remaining assets.
Hotbit, a centralized exchange (CEX), was founded in early 2018 and has since served approximately 5 million users worldwide, according to their data.
The decision to close is based on several reasons. The first reason cited by the platform’s team is the deterioration of working conditions due to the suspension of operations in the summer of 2022 during an investigation involving one of their former employees, as well as the outflow of funds from centralized platforms following the FTX crash and a series of bank bankruptcies in the United States.
Another reason, according to Hotbit, is the changing trends in the crypto industry. The message highlights that the industry has started to develop in two directions: some participants are embracing regulatory rules, while others are becoming more decentralized.
“Centralized exchanges are becoming increasingly cumbersome, with complex and interconnected businesses that struggle to comply with regulatory norms or decentralization standards, and they are unlikely to align with long-term trends,” believes the Hotbit team.
Furthermore, the announcement states that the industry’s uncertainty poses many risks. The exchange supported over 2,000 digital currencies, but now the Hotbit team acknowledges that the operational model supporting a wide range of assets is unstable from a risk management perspective.
