Crypto winter – Crypto weather continues to be tough on exchanges. While theyear 2022 has brought its share of desolation, many are unable to recover from the cold snap that has settled over our beautiful ecosystem. This is the case of hot bit which announced last night to completely stop its activity.
Hotbit: the reasons for the closure in 3 points
To understand Hotbit’s decision, let’s take into account three basic reasons who have contributed to this end.
2022: a dark year for cryptocurrencies
Indeed, beyond the crisis of confidence that weighed on the ecosystem in 2022, in particular with the fall of the Terra ecosystem (LUNA) or that of theFTX/Alameda empirewhich led to a flight of user funds against centralized exchanges (CEX) including Hotbit.
“It’s time to bow down. For 5 years and 4 months, the Hotbit team has been proud to participate in a wonderful crypto trade fair with 5 million users. However, it is with great regret that we have made the decision to halt all CEX operations as of May 22, UTC 04:00. We ask all users to remove their remaining assets by June 21, UTC 04:00. »
Tweet by Hotbit – Source: Twitter
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2023: US regulation attacks the exchanges
In fact therefore, and we coming to the second reasonn this closure, the American regulation showed its desire to harshly regulate the crypto industry. According to Hotbit, centralized exchanges (CEX) are therefore becoming increasingly complex to manage, as they are subject to these strict regulations.
“The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to adhere to, whether for compliance or decentralization, and unlikely to respond to long-term trends. »
Cyberattacks: a gangrene for Hotbit
Finally, the cyberattacks also got the better of the exchange. Thus, by multiplying the services to create added value, Hotbit exposed itself to numerous attacks which called into question its viability.
“However, due to the inherent uncertainty in the industry, managing the risks associated with taking on a wide range of assets has become unsustainable. Repeated cyber attacks and exploitation of project vulnerabilities by malicious users have caused significant losses to Hotbit. These factors have led to the conclusion that Hotbit’s current operating model is no longer viable from a risk management perspective. »
Users now have until June 21 to withdraw their cryptocurrencies from the platform and a contact form is provided if you have any questions.
While we thought the page turned on the cascading bankruptcies that punctuated the year 2022, 2023 also announces its share of disappointment. The platform Bit4You also announced, not long ago suspension of his services adding to the now long list of fallen exchanges.
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