On Thursday, the cryptocurrency exchange Hotbit said it was “suspending trading, deposit, withdrawal and funding functions”, without setting a timeframe for its resumption. Explaining the decision, Hotbit stated:
“A former Hotbit manager who left in April this year was, unknown to Hotbit, involved in a project in 2021 that law enforcement authorities now believe is suspected of violating criminal laws. As a result, several Hotbit managers have been subpoenaed by law enforcement since the end of July and are assisting in the investigation. In addition, some Hotbit funds have been frozen by law enforcement, which has prevented the exchange from operating normally.”
The company further states that the rest of its employees are not involved in the project and have no knowledge of the alleged illicit activities. Regarding the frozen assets, Hotbit said:
“All users’ assets are safe on Hotbit. We will resume everything to normal as soon as the assets are unfrozen. All assets and user data on Hotbit are safe and correct. However, we continue to actively cooperate with the law enforcement authorities in their investigations and we continually communicate with them through our attorneys and request the release of the funds.
Hotbit is currently based in Hong Kong. As a result of the trading freeze, all pending orders will be canceled and all leveraged ETF positions will be liquidated. In the meantime, Hotbit states that income from users’ investment products will be distributed as normal and that a “compensation plan” will be published for users when the site returns to normal operation. In the last 24 hours, Hotbit processed $25.6 million worth of digital asset transactions.
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