Hotbit shuts down all CEX operations
The crypto exchange Hotbit has announced the shutdown of all its Centralized Exchange (CEX) operations. The exchange cited three key reasons for proceeding with this decision, despite expressing regret.
Starting May 22nd, the move will take effect, and users are advised to withdraw their remaining assets from the platform before June 21.
Hotbit explained that the primary reason for the shutdown was the “deterioration of operating conditions.” The exchange noted that after Hotbit’s weeks-long suspension in August 2022 due to an investigation, the industry faced a series of crises, including FTX’s collapse and banking issues. These bank incidents caused USDC to deviate from $1, leading to worsened cash flow and ongoing fund outflows from CEX users, including Hotbit, according to the team.
According to the Hotbit team, a shift in the crypto industry trend served as the second reason for the decision. “Centralized exchanges (CEX) are becoming increasingly cumbersome, featuring highly complex and interconnected businesses that prove difficult to comply with, whether for compliance or decentralization purposes. As a result, they are unlikely to align with long-term trends,” the exchange explained.
Additionally, the sequential collapse of centralized institutions has prompted the industry to either adopt a regulation or become increasingly decentralized. Hotbit noted that the prevailing uncertainty in the crypto industry has rendered various opportunities fraught with risks.
The team disclosed that the exchange had experienced multiple cyber attacks and exploitation of project flaws by malicious users, resulting in significant losses. “The operation model of supporting a diverse range of assets is unsustainable from a risk management standpoint,” Hotbit commented.
In addition to Hotbit, numerous other exchanges like LocalBitcoins have ceased operations. Some crypto exchanges including Bittrex and Luno shut down operations in a particular region, while others shut down completely, citing vague regulatory policies and bankruptcy. Bittrex halted operations in the U.S. and Luno stopped its offerings in Singapore. With the list seemingly growing, FUD (fear, uncertainty, and doubt) within the crypto industry continues to escalate.
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