Crypto Exchange Hotbit Suspends Trading After Freezing Funds

Cryptocurrency exchange Hotbit has suspended trading, deposits and withdrawals after authorities froze some of its funds due to a suspected breach of criminal law.

The move to suspend services came after allegations that a former executive, who Hotbit said quit in April, was involved in activities that went “against Hotbit’s internal principles,” the company said in a statement Wednesday.

Some of the platform’s top executives were subpoenaed late last month and are cooperating with the agency’s investigation, it added.

Hotbit did not mention which jurisdictional agency is investigating its managers, or the total value of the frozen funds, although it appears unlikely to be from the US.

The company’s about page says it is registered in both Estonia and Hong Kong while it is based in Shanghai and Taipei. CB Insights lists Hotbit’s headquarters in Hong Kong while Crunchbase reports Beijing.

Hotbit did not return Blockworks’ request for comment on the trading suspension and confirmation of where it is headquartered by press time.

It expects to resume services once the assets are frozen, but the firm is not sure when that will be. Hotbit, a smaller exchange compared to the likes of Binance and Coinbase, reported $350 million in trading volume in the past 24 hours, per CoinMarketCap.

The company claims that other employees in Hotbit’s management, and the platform itself, were not involved in the alleged illegal activities under investigation.

“We continue to actively cooperate with law enforcement authorities in their investigation and continuously communicate with them through our lawyers and seek the release of the frozen assets,” Hotbit said in its announcement. “The assets of all users are safe on Hotbit.”

Unfulfilled open orders on the platform will be voided until services are resumed to prevent possible losses, and all leveraged ETF positions will be liquidated.

Founded in 2018, Hotbit says it has more than one million users from 170 countries. The firm’s core team members are from the US, China and Taiwan, and over 90% of its users are non-Chinese, according to its website.

Last year, the platform suspended services for about a week after a cyber attack took down many of its services. The attackers also attempted to take control of the stock exchange’s wallets.

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