Hotbit said that centralized exchanges are becoming more cumbersome and highlighted that it is “unlikely to meet long-term trends.“
Crypto exchange Hotbit announced that it would be halting operations as of May 22. The exchange asked its users to withdraw funds before June 21, at 4:00 am UTC.
In an announcement, the exchange said that its operating conditions have deteriorated since a former member of its team was subjected to an investigation in August 2022. According to the exchange, the probe forced it to stop its business for weeks.
In addition, Hotbit also cited various incidents within the crypto space as contributors to its decline. The exchange cited the FTX collapse and the banking crises that caused the USD Coin (USDC) depegging event as reasons for its deteriorating cash flow. Hotbit said the incidents resulted in a continuous outflow of funds from centralized exchanges.
The Hotbit team also believes centralized exchanges are becoming “increasingly cumbersome” and are “unlikely to meet long-term trends.” The exchange said the only options are to become more decentralized or embrace regulation.
The exchange also blamed the repeated cyberattacks and the exploitation of “project defects by malicious users” as reasons for its downfall.
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As the announcement came, several members of the community reported that they were unable to withdraw their funds from the exchange.
How do we withdraw when the withdrawal option has been disabled? Please enable withdrawal so we can withdraw our assets https://t.co/gXlGpR4hOV
— laith (@laith2762) May 22, 2023
Some also warned community members of phishing links that pretend to be the official Hotbit exchange on Google.
While Hotbit is taking its bow, other exchanges are carrying on, with some launching campaigns to fix the issues in the crypto industry. Crypto exchange Coinbase recently published a campaign to “update the system.” OKX took it a step further; it wants to “rewrite the system” entirely.
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