Crypto Exchange Hotbit Froze Withdrawals and Customer Funds

Crypto exchange Hotbit has suspended crypto trading, deposits, and withdrawals due to alleged criminal misconduct of a former employee. The law-enforcement authorities have frozen some of the firm’s funds during a criminal investigation.

Former Employee Suspected of Violating Criminal Laws

On August 10, Hotbit stated on its website that the platform has “suspended trading, deposit, withdrawal and funding functions,” with no estimated restoration time. However, the company claims that the customers’ funds are safe.

"Law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally," the company said in the statement. "Hotbit will resume normal service as soon as the assets are unfrozen."

According to Hotbit, the employee engaged in a project outside the company last year. Authorities claim that the person in question is now alleged to have broken the law. Hotbit employed the worker until April.

Several senior Hotbit managers who weren’t participating in the project have been summoned to provide testimony in order to help with the investigation.

"As a result, a number of Hotbit senior managers have been subpoenaed by law enforcement since the end of July and are assisting in the investigation. Furthermore, law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally," wrote the company.

All Open Orders Will Be Canceled

At 12:00 UTC on August 10, all open orders that have not been executed will be canceled to stop losses, and all leveraged exchange-traded fund (ETF) holdings will be forced liquidated in accordance with their values. Hotbit has a 24-hour trading volume of $350 million, according to CoinMarketCap data.

Hotbit is currently headquartered in Shanghai and Taipei. The company is registered both in Hong Kong and Estonia. According to the company’s website, most of its staff is from China, Taiwan, and the U.S.

Hard Times for Crypto Companies

The bear market and harsh trading environment are mowing crypto businesses. Voyager Digital, Celsius, and Three Arrows Capital are among the most noteworthy names which joined a long list of cryptocurrency companies that have experienced liquidity problems during the bear market of 2022.

This week, on August 9, the German crypto exchange Nuri GmbH filed for insolvency with a Berlin court. The start-up crypto bank was serving 500,000 customers.

On the Flipside

  • In a tweet following the announcement, Hotbit said that it is “continuously applying for the release of the frozen assets.”
  • During the freeze, users will still be able to profit from their “investment products.” Last but not least, once Hotbit’s website resumes operation—which is still to be determined—they will be given a compensation plan.

Why You Should Care

As claimed by the company, Hotbit has accumulated more than 7,000,000 registered users from more than 210 countries and areas worldwide.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

Rate This Article
In order to improve, we give you the opportunity to rate DailyCoin content
Author

Paulina is a writer, reporter, and digital craftswoman. Her educational background extends from anthropology to IT & multimedia. She has experience working with tech startups, as well as mastering the craft of journalism. At DailyCoin, Paulina focuses on the world of metaverses, NFT marketplaces, NFT art, and blockchains backing NFT technology.