Popular Bitcoin exchange Hotbit has stopped trading, deposits and withdrawals until further notice.
Incident reaches out to an executive who left the company in April
All transactions will remain suspended until further notice, according to the exchange. Hotbit reports that its platform is currently forced to make strict decisions due to an ongoing criminal investigation it is facing. Hotbit officials say funds will be frozen over the course of the investigation. Frozen funds make it difficult for Hotbit to continue its day-to-day operations. “Users’ funds are safe, please don’t worry,” the exchange reassured on Twitter today.
What Happened on the Bitcoin Exchange?
A former Hotbit executive became involved last year in a fraudulent project deemed by authorities to be a violation of criminal law. It then dragged the exchange into a legal process that led to suspension of operations. Hotbit shares that law enforcement has called several Hotbit senior employees to court since last month. The exchange was in contact with law enforcement throughout the process. Hotbit summarized the event in a statement on its official website today:
(We are suspending operations) This is because a former Hotbit management employee who left Hotbit in April this year was involved in a project last year (which goes against Hotbit’s internal principles and is unknown to Hotbit) and law enforcement now violates criminal laws. is to take part in a project that they think is suspect. That’s why a number of Hotbit senior executives have been subpoenaed by law enforcement since the end of July and are helping with the investigation. In addition, law enforcement froze some Hotbit funds, which prevented Hotbit from working normally.
The Bitcoin exchange also shared an announcement about the treatment of user funds during the freeze:
- User’s unfilled open order will be canceled before Hotbit’s service is recovered to avoid losses from market fluctuations;
- To avoid loss from holding positions, all user’s leveraged ETF positions will be forcibly liquidated at their respective net values by 15:00 on August 10, 2022;
- The income of the user’s investment products will be distributed as normal;
- Compensation plan for users will be published when the website is reopened, please wait patiently.
There is currently no timetable for when trading, deposits and withdrawals will resume on Hotbit. However, Hotbit is collaborating with law enforcement to follow up the investigation and continue the service. They will provide end-to-end updates as and when the investigation ends with results.
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