The crypto exchange Hotbit announced that it has made the decision to stop all CEX operations from 4:00 UTC on May 22, 2023, and that users need to withdraw their remaining assets before June 21, UTC 04:00. This decision is based on three reasons:
Firstly, the deterioration of the operating conditions. After the Hotbit management team was forced to suspend operations for several weeks due to the investigation in August 2022, the industry has experienced a series of crises, including the collapse of FTX, bank crises causing USDC off-peg incidents, resulting in continuous outflows of funds from CEX users, including Hotbit, and deteriorating cash flow.
Secondly, the change in the crypto industry trend. The successive collapse of large centralized institutions has led the industry to gradually in two ways: either embrace the regulation or become more decentralized. The Hotbit team believes that CEX are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization, and are unlikely to meet long-term trends.
Thirdly, due to the industry's uncertainty, various opportunities also contain many risks. Hotbit has also suffered numerous problems, such as repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses. Therefore, the Hotbit team believes that the operation model of supporting a diverse range of assets is unsustainable from a risk management standpoint.
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