Hotbit, a popular cryptocurrency exchange, has announced its decision to cease all operations, Hotbit has reached the end of the road in its five-year stint in the crypto industry, during which it solidified its significance as a centralized crypto exchange (CEX) that catered to over a million users globally. Despite its strong presence, various obstacles and transformations within the industry compelled the platform to make a tough call – ceasing all operations come May 22nd, 2023 at exactly 04:00 UTC. To avoid leaving clients stranded and frustrated Hotbit has set a deadline for asset withdrawal before June 21st, 2023, at precisely 04:00 UTC. This article will address why this development transpired, how it affects you as a user retaining funds under their custody and what steps you can undertake now for your own protection.
A Brief Overview of Hotbit
Hotbit was founded in January 2018. Established by a multicultural team comprising members from China, Taiwan and the USA with dual locations in Hong Kong and Estonia – Hotbit exchange currently operates primarily out of Shanghai and Taipei. With more than one million registered users spanning over 170 countries globally – this widely acclaimed trading platform stands out for its broad listing selection as well as multilingual support available in six different languages.
Hotbit was known for its diverse range of assets and value-added methods. Many emerging assets were listed on the exchange for the first time, including GRIN, SHIB, KSM, and others. Hotbit was also the first to offer staking services, starting with ATOM, and the first to conduct DeFi mining business using Compound. Based on the info by CoinMarketCap, The platform holds an Estonian MTR license, an American MSB license, an Australian AUSTRAC license, and a Canadian MSB license.
The Reasons Behind Hotbit’s Closure
Hotbit’s decision to shut down its operations is based on three main reasons:
A Decline in Operating Conditions
The Hotbit management team was forced to suspend operations for several weeks due to an investigation in August 2023.Subsequent to these events, the cryptocurrency industry witnessed a string of crises that caused significant upheaval. These included the demise of FTX and bank-related issues that caused USDC off-peg occurrences, leading to a continuous exodus of funds from users of centralized exchanges such as Hotbit and a slump in cash flow.
Change in the Crypto Industry Trend
The continued collapse of large centralized institutions has forced the industry to gradually move in two directions: either embrace regulation or become more decentralized. As a result, Hotbit believes that centralized exchanges (CEX) are becoming increasingly difficult to run, with highly complex and interconnected businesses that are challenging to comply with, whether for compliance or decentralization and are unlikely to succeed in the long run.
Concerns Related to Risk Management
Throughout the years, Hotbit has faced numerous challenges, such as repeated attacks by hackers and the abuse of project defects by malicious users, which resulted in significant losses. Due to this, the Hotbit team believes that the current model of supporting a diverse range of assets cannot be sustainable.
The Impact on Hotbit Users
Users of Hotbit are advised to withdraw their remaining assets before June 21, 2023, at 04:00 UTC. This gives users a month to move their funds away from Hotbit. At the time of writing, we don’t know if there are any problems with withdrawing funds from the Hotbit exchange, but it is advised to withdraw funds as soon as possible to avoid any losses.
The Future of Centralized Crypto Exchanges
The closure of Hotbit can be considered to be another significant event in the crypto industry, highlighting the challenges that centralized exchanges are facing today. The cryptocurrency industry is at a crossroads, with centralized players either needing to embrace regulation or become even more decentralized. This trend is not unique to Hotbit, as other major exchanges like Bittrex have also shut down their operations for similar reasons.
The Advantages of Moving to Non-Custodial Wallets
Transitioning to non-custodial wallets from centralized exchanges is a strategic move in the cryptocurrency world. This shift offers a multitude of benefits that enhance the user’s experience in managing their digital assets.
Full Control Over Private Keys
With non-custodial wallets comes an undeniable perk; full control over personal key information ensures complete ownership of cryptocurrency assets. Centralized exchanges operate differently in that they retain this information on behalf of clients – an arrangement that could expose them to security vulnerabilities.
Freedom from Regulatory Pressures
Non-custodial wallets are not subject to the same regulatory pressures as centralized exchanges. This provides users with more privacy and freedom in their transactions. Centralized exchanges, on the other hand, are often subject to stringent regulations that can limit user freedom.
Investors are often at risk of losing their cryptocurrencies due to security breaches and hacks that plague centralized exchanges. A safer alternative is switching to a non custodial wallet as it presents fewer vulnerabilities for hackers to exploit. The added layer of security offered by such wallets provides enhanced assurance and tranquility for users.
Why Choose ZenGo?
ZenGo is a non-custodial crypto wallet that ensures robust security through its use of Multi-Party Computation (MPC) cryptography. This technology eliminates the vulnerability of seed phrases, providing a secure environment for your digital assets. ZenGo also ensures that your account is always recoverable through a combination of user-controlled elements such as your email account, an encrypted biometric scan (3D FaceLock), and a unique ZenGo recovery file.
Web3-Ready Multi-Chain Crypto and NFT Wallet
In addition to its security features, ZenGo is Web3-ready and supports a wide range of digital assets, including Bitcoin, Ethereum, Tezos, and over 70 other cryptocurrencies. It also allows for the storage, viewing, and discovery of NFTs, DeFi, and thousands of Dapps. With ZenGo, buying, selling, and trading crypto is as simple as a few taps.
24/7 Customer Support and an Outstanding User Interface
ZenGo also stands out for its exceptional customer support, available 24/7, and user-friendly interface, making it an excellent choice for both new and experienced crypto users.
How to Withdraw Funds from Hotbit to ZenGo
Due to Hotbit ceasing operations, it is strongly recommended that users withdraw their remaining assets before June 21, 2023, at 04:00 UTC.
If you wish to withdraw your funds to a secure non-custodial wallet, ZenGo is your best option. Install ZenGo and complete the short onboarding process before withdrawing your funds from Hotbit.
Here is a step-by-step guide on how to withdraw funds from Hotbit to ZenGo:
- Log into your Hotbit account.
- Go to the ‘Wallet’ section.
- Choose the cryptocurrency you want to withdraw.
- Click on ‘Withdraw.’
- Input the withdrawal address for your cryptocurrency. Also, make sure that the desired token you wish to withdraw from Hotbit is compatible with ZenGo. To view your new ZenGo address, open the app and tap on the desired token.
- Specify the amount you want to withdraw.
- Review the transaction details, taking note of any withdrawal fees.
- Click ‘Submit’ to start the withdrawal process.
- If necessary, confirm the withdrawal through email confirmation or any other security check.
Conclusion: The End of an Era and the Beginning of a New One
The closure of Hotbit marks another milestone in the crypto industry’s history. However, it also signals the beginning of a new one. As the industry continues to evolve, exchanges are faced with the choice of either embracing regulation or becoming more decentralized.
As indicated by their announcements and despite current events, it seems that the Hotbit team remains relatively optimistic about the future of crypto innovation despite the challenges. Taking their bows, they leave behind a legacy of assets and value-added methods that have contributed to the development and growth of the crypto industry.