Crypto exchange Hotbit said it would cease all operations at 04:00 UTC on May 22 and advise its users to withdraw their assets before June 21.
Why Hotbit performs formwork operations
In a May 22 statement, Hotbit explained that centralized exchanges had witnessed a continuous outflow of funds following the various crises that hit the crypto industry.
Hotbit cited its investigations in August 2022, alongside the collapse of FTX and the USD Coin (USDC) depeg, as key catalysts for the deteriorating business conditions.
In addition, the China-based exchange noted that the subsequent collapse of large centralized institutions had changed the trend in the crypto industry.
According to the exchange, centralized entities continue to embrace regulation or become more decentralized. hot bit wrote:
“The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to meet, whether for compliance or decentralization, and are unlikely to meet long-term trends .”
Last year, several centralized crypto entities, such as FTX, Celsius, BlockFi, etc., collapsed amid the market’s record decline. These events have led to increased regulatory oversight of the crypto industry by financial regulators around the world.
Hotbit added that it was also collapsing as it has suffered numerous “cyber attacks and project defect exploits by malicious users”. According to the company, this has resulted in significant losses to its business because the “business model of supporting a broad range of assets is unsustainable from a risk management standpoint.”
According to the statement, Hotbit was active for five years and four months and serves 5 million users. CoinMarketCap said the platform has an Estonian MTR license, a US MSB license, an Australian AUSTRAC license and a Canadian MSB license.
Centralized exchanges are more tightly controlled.
After the collapse of FTX, centralized exchanges have faced increased regulatory scrutiny over their activities.
Several crypto exchanges such as Beaxy and Bittrex were forced to leave the US due to regulatory action. Binance canceled its derivatives license with the Australian Securities and Investments Commission (ASIC) and closed its operations in Canada.
Others, such as Coinbase and Gemini, have expanded operations abroad due to the uncertain regulatory environment in the US
In the meantimeCryptoSlate reported that the trading volume of these exchanges fell to $2.77 trillion in April – the lowest since December 2022.
