Hotbit Announces Closure Of CEX Operations
Hotbit, a popular cryptocurrency exchange, has announced its decision to halt all centralized exchange (CEX) operations after being a part of the crypto landscape for 5 years and 4 months. In a heartfelt message to its 5 million users, the Hotbit team expressed their regret and requested all users to withdraw their remaining assets by June 21, UTC 04:00.
It's time to take a bow 🙇
For 5 years and 4 months, the Hotbit team has been proud to participate in a wonderful crypto show with 5 million users. However, it is with great regret that we have made the decision to stop all CEX operations from May 22, UTC 04:00. We kindly ask all…— Hotbit News (@Hotbit_news) May 22, 2023
Decision to Cease CEX Operations
The decision to cease CEX operations is based on three key reasons. Firstly, the deteriorating operating conditions have posed significant challenges. Following a mandatory suspension of operations due to an investigation in August 2022, the industry witnessed a series of crises, including the collapse of FTX and bank crises leading to USDC off-peg incidents. These events resulted in continuous outflows of funds from CEX users, including Hotbit, and adversely impacted cash flow.
Secondly, the team noted a shift in the trend of the crypto industry. The successive collapses of large centralized institutions have pushed the industry towards two paths: embracing regulation or moving towards decentralization. The Hotbit team believes that CEXs are becoming increasingly burdensome, with complex and interconnected businesses that make compliance and decentralization difficult. It is unlikely that they will align with long-term industry trends.
Farewell to CEX
Hotbit has been recognized for providing a wide range of assets and value-added services since its inception. It was the first exchange to list emerging assets like SHIB, KSM, and GRIN, and introduced staking services and DeFi mining with Compound. However, due to industry uncertainty, these opportunities also brought significant risks. Hotbit encountered challenges such as repeated cyber attacks and malicious exploitation of project defects, resulting in substantial losses. Consequently, the team believes that the operation model supporting a diverse range of assets is unsustainable from a risk management perspective.
The Hotbit team bid farewell to their users, expressing gratitude for the joys and tears shared along the journey. Despite ending their show, they remain hopeful about the future of crypto innovation. Some team members will continue to fight for a bright future in the industry.
Hotbit’s decision to cease CEX operations reflects the challenges faced by centralized exchanges and the evolving dynamics within the crypto landscape. As users complete their withdrawals and the industry witnesses this significant development, it remains to be seen how the broader market will respond and adapt to the changing trends and challenges ahead.
