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 to Violate 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 till 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
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. 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.
More about Celsius bankruptcy:
Celsius Network Files for Bankruptcy Protection, Leading to a 50% Loss for CEL
More about Nuri filing for insolvency:
Crypto Exchange Nuri Files for Insolvency in Germany, Celsius Bankruptcy to Blame