Crypto Exchange Hotbit Shutting Down Its Operations
Hong Kong-based crypto exchange Hotbit made an announcement to close its operation on May 22, 2023. Customers are advised to withdraw their remaining assets from the exchange before June 21.
Hobit ran its operation for the last five years with 5 million users. No one wants to close their business after running for five years. One of the former members of the Hotbit team was under investigation in August 2022. The situation of the exchange started deteriorating.
After the collapse of the crypto exchange FTX, regulatory agencies focus more on crypto. The increase in regulatory scrutiny is one of the reasons to make this decision. To operate a business in the crypto space, it has to be more decentralized or embrace regulations to become regulatory compliant.
Many people lost their hard-earned crypto in FTX. They are more concerned about the risk of holding crypto assets in centralized crypto exchanges. They pay close attention to the security and safety of their crypto assets. The continuous outflow of cryptocurrency from the exchange makes it difficult to run the business.
The banking crisis and depegging of stablecoin USDC contributed to making the situation worse. Hotbit pointed out the unfavorable market situation and regulatory security behind its decision to close its operation. According to Hotbit, crypto exchanges are becoming increasingly cumbersome and it is very difficult to operate a crypto business.
I do not use Hotbit. There are complaints that customers cannot withdraw crypto assets from the exchange. The withdrawal option of Hotbit has been disabled. If you use this crypto exchange, you can check it out and verify that.
It is sad to see that the environment is not favorable to run crypto businesses and regulatory crackdown makes companies take hard decisions. Pushing crypto businesses away from the country is not a good decision. The good news is, some countries are there to embrace crypto businesses and support them to grow.
It is difficult to trust a centralized exchange only because you see that the exchange has run its operation for four years. The exchange can close its operation in five years like Hotbit did. The bear market is really tough. Who knows what we have to see next?
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