The cryptocurrency exchange Hotbit has halted trading, deposits, and withdrawals after part of its money were frozen by authorities due to a possible criminal offense.
Hotbit said in a statement on Wednesday that the decision to halt services was made in response to claims that a previous manager had engaged in actions that “went against corporate standards.” Hotbit claimed the manager departed the firm in April.
Senior management for the platform was subpoenaed late last month and is helping the government with its probe, it added.
Hotbit’s Employee Had Criminal Links
Although it seems doubtful that the money is from the US, they did not specify which jurisdictional agency is looking into its management or the overall amount of the frozen cash. According to the company’s website, it is located in Shanghai and Taipei and registered in both Hong Kong and Estonia. While Crunchbase puts Hotbit as headquartered as being in Beijing, CB Insights mentions Hong Kong.
When assets are unfrozen, the business anticipates continuing its services, although it is unsure of when that will happen. According to CoinMarketCap, Hotbit, a less popular exchange than Binance and Coinbase, reported $350 million in trading volume during the previous day.
According to the corporation, neither the platform itself nor other members of Hotbit’s management was allegedly involved in the illegal actions under investigation. Before services restart, open orders that have not yet been executed on the platform will be voided to avoid potential losses, and any leveraged ETF holdings will be compelled to be liquidated.
Hotbit, which was founded in 2018, claims to have more than a million members across 170 nations. According to the company’s website, the majority of its users are non-Chinese, and the key team members are from the US, China, and Taiwan.
The platform’s services were disabled for almost a week last year after a cyberattack brought many of them to a halt. The attackers made an effort to take over the exchange’s wallets as well.