Hotbit, a cryptocurrency exchange, announced Thursday that it had “suspended trading, deposit, withdrawal, and funding functions,” with no timetable for resumption.
Why did Hotbit had to suspend transactions?
The company explained his decision:
“A former Hotbit management employee who left in April this year was, unbeknownst to Hotbit, involved in a project in 2021 that law enforcement authorities now think is suspected of violating criminal laws. As a result, several 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.”
The company also claims that the rest of its employees are not involved in the project and are unaware of the alleged illegal activities.
Are user assets safe?
Hotbit has the following to say about the frozen assets:
“The assets of all users are safe. We will resume normal service as soon as the assets are unfrozen. All user’s assets and data on our servers are secure and correct. However, we are still actively cooperating with the law enforcement authorities in their investigations and are continuously communicating with them through our lawyers and applying for the release of funds.”
About the crypto exchange.
The exchange is currently based in Hong Kong. All unfilled orders will be canceled, and all leveraged exchange-traded fund positions will be liquidated due to the trading halt. Meanwhile, Hotbit claims that the income from users’ investment products will be distributed normally and that when the website is restored, the company will publish a “compensation plan” for users. Hotbit has processed $25.6 million in digital asset transactions in the last 24 hours.
According to Hotbit’s website, the exchange has over 700,000 registered users from over 210 countries. “We have gathered its users from Twitter, Telegram, VK, and Facebook by focusing on the world’s emerging markets such as Russia, Japan, South Korea, Turkey, and Southeast Asian countries,” the website explains.
The exchange does not offer services to users in several countries, including the United States, China, Singapore, and Japan.