Hotbit Announces Closure Of Its CEX Operations Months After Criminal Probe

Months after being a subject of a criminal investigation, Hotbit, the Shanghai-based cryptocurrency exchange with over 5 million users, said that it is finally "time to take a bow" as it announced shutting down all of its crypto exchange operations, citing multiple reasons.

"With so many joys and tears, our show is over. We want to say thank you and take a bow now," Hotbit said in a Monday blog post where it revealed its decision to shut down all of its cryptocurrency exchange operations.

"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," the company said.

Hotbit cited three major reasons behind its latest decision, which include the criminal investigation that started last August, the change in the cryptocurrency trend, and a series of cyber attacks and exploits that resulted in substantial losses.

Last August, Hotbit suspended its crypto trading, withdrawals and deposits since authorities froze some of its funds over an investigation of a former employee, which prevented the company from "running normally."

At the time, the crypto company refused to reveal the jurisdiction of the investigation but shared that the employee in question worked for Hotbit until last April. The said employee was allegedly involved in an external project that was against the company's guidelines and was suspended for violating criminal laws.

While Hotbit said at the time that "the rest employees of Hotbit's management are not involved in the project and have no knowledge of the illegal information involved in the project," it mentioned that "a number of Hotbit senior managers have been subpoenaed by law enforcement since the end of July and are assisting in the investigation."

Along with the series of crises, Hotbit underlined that the criminal investigation propelled the deterioration of its cash flow. The crypto company also pointed out that it has become more difficult running a centralized exchange considering that global regulations in the industry are getting a lot stiffer.

"The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization and are unlikely to meet long-term trends," the platform said.

Despite its recent decision, Hotbit highlighted that it "still believes a bright future about crypto innovation" and noted that "some of us will still fight for it."

Hotbit also reminded its users to " withdraw their remaining assets before June 21, UTC 04:00."