Hotbit Halts Its Withdrawals Due to Ongoing Criminal Investigation

Hotbit Halts Its Withdrawals Due to Ongoing Criminal Investigation

Almost every week crypto exchange users receive news about companies halting their withdrawals. 

Hotbit, Hong Kong-based crypto exchange established in 2018, has announced the suspension of trading, deposit, withdrawal, and funding services.

According to the statement shared on the company's blog post, Hotbit decided to suspend its services due to an ongoing criminal investigation concerning a former Hotbit management employee

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The company states that a former employee, who left the company in April of 2022, has been involved in a project, which has violated criminal laws. As a result of these accusations, many Hotbit Senior managers have been called to testify. 

In the statement, Hotbit highlights that the actions of the former employee were “against Hotbit's internal principles and of which Hotbit was unknown”. Moreover, the company adds:

Hotbit and 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.

The company also highlighted that law enforcement has frozen some of its funds, preventing Hotbit from running properly. 

In the official announcement, Hotbit reassured its users that their funds are safe. Moreover, it promised that the services will be resumed immediately after the company’s assets will be unfrozen by law enforcement

Hotbit informs that due to its frozen assets, all unfilled orders will be canceled to “prevent loss due to market fluctuations.” Similarly, all leveraged ETF (exchange-traded fund) positions have been liquidated

Furthermore, the company notes users will continue to receive their income from “investment products” as usual and will receive compensation when Hotbit returns to operate normally. 

The summer of 2022 has been exceptionally eventful in terms of crypto exchanges halting their withdrawals or declaring bankruptcy. Volatile market conditions resulted in Vault, Celsius, Voyager, and Zipmex freezing their withdrawals, while companies like Celsius, Voyager, Zipmex, and Three Arrow Capital have all declared bankruptcy.

Gile K. - Crypto Analyst

by Gile K. - Crypto Analyst, BitDegree