Crypto Exchange Hotbit Says ‘Deteriorating Conditions’ Forced It to Stop Operations
China-headquartered cryptocurrency exchange, Hotbit, said on May 22 it had made the decision to halt “all cex operations.” The crypto exchange pointed to the “continuous outflows of funds from cex [centralized exchange] users” as one of the many factors that forced Hotbit to stop operations.
The Crypto Industry’s ‘Deteriorating Conditions’
The Asian cryptocurrency exchange, Hotbit, recently said it was shutting down the platform due to what it characterized as “deteriorating conditions” in the crypto industry. According to a statement issued by the exchange on May 22, these conditions have, in turn, resulted in the “continuous outflows of funds from cex [centralized exchange] users, including Hotbit, and deteriorating cash flow.”
In addition to dealing with capital outflows and reduced cash flow, the Hotbit team claimed in the statement that the constant upheavals in the crypto industry are making it more difficult to operate a cex. The Hotibit team said:
The successive collapse of large centralized institutions has led the industry to gradually in two ways: either embrace the regulation or become more decentralized. 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.
An Unsustainable Business Model
Despite being one of the first exchanges to list emerging assets such as SHIB and GRIN, the Hotbit management team claimed in the statement that cyber attacks suffered in the past and the exploitation “of project defects by malicious users” made its business model an unsustainable one. According to the team, such incidents are some of the reasons why the crypto exchange has incurred “significant losses.
Meanwhile, the statement also noted that Hotbit’s decision to halt cex operations came less than a year after the exchange’s management team was forced to “suspend operations for several weeks due to the investigation in August 2022.” As reported by Bitcoin.com News in 2022, Hotbit was forced to make this decision after seeing law enforcement freeze the crypto exchange’s funds.
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Source: Bitcoin.com
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Text source: Crypto Breaking News
