Another crypto platform found itself in hot water yesterday, Hotbit was forced to suspend its services amid a criminal investigation.
Hotbit Suspends Services
In an announcement on its support platform, Hotbit announced that it had no choice but to suspend services for its users. The exchange revealed to its users that withdrawals, deposits, and funding were all temporality disabled. With Hotbit serving approximately 7 million users around the globe, it’s likely that this will cause significant disruption. Unfortunately, as of yet, Hotbit has not offered any estimates as to when the exchange will be able to resume its usual services.
The exchange stated that “Law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally”. With Hotbit currently under investigation, funds getting frozen is par for the course. However, with these funds likely belonging in a large part to the platforms user’s, it does raise questions about the security of keeping funds on even the best exchanges.
While this might seem like the end of Hotbit based on what happened to other companies that halted withdrawals, the company has stated that as soon as the assets are unfrozen, service will resume as usual. It went on to say that users’ assets and data on Hotbit are all secure and correct. We can only hope that Hotbit is able to this problem resolved promptly so users will again be able to go about their business.
Hotbit said that the investigation and subsequent suspension of services was the result of a single former employee’s actions. An ex-Hotbit management employee was allegedly involved in a project in 2021 that authorities now believe violated criminal laws. The project was against Hotbit’s internal guidelines and the company stated that the employee’s venture was at the time unknown to them.
As a result of this investigation, several of Hotbit’s senior management team have been subpoenaed and are aiding authorities in the investigation. Neither Hotbit nor its employees have any knowledge of the illicit information from the project. However, the exchange is still working closely with law enforcement in an attempt to bring services back online as soon as possible.
While this disruption will likely have caused issues for users, it will hopefully be resolved soon.
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