Criminal Investigation Results In Service Suspension At Hotbit
The trading platform Hotbit Crypto Exchange has suspended services after being subpoenaed in conjunction with a criminal investigation into a former employee.
Ex-Employee’s Alleged Illegal Activities
As a part of the ongoing criminal investigation, law enforcement agents have frozen certain funds of the firm, forcing Hotbit to suspend crypto trading, deposits, and withdrawals. The firm released a statement on the matter, which said,
“We regret to inform you that Hotbit will have to suspend trading, deposit, withdrawal and funding functions, the exact time of resumption cannot be determined at the moment.”
The statement also shed some light on the former employee who is being investigated due to their involvement in an external matter in 2021 that the company claims to have no inkling of. The employee, who left the company in April 2022, is suspected of violating criminal laws in this external project. As a result, several senior managers have been subpoenaed and are cooperating with law enforcement in the investigation. The team vehemently denied having any connection or knowledge of the alleged illegal activity on the part of the management as well as the other employees of the firm.
User Assets And Fund Management
In addition to the subpoenas, several funds have also been frozen as a part of the investigation, preventing the exchange from conducting business per usual, which is why they have had to suspend services. The statement from the Hotbit team also revealed that they have been applying for the release of the frozen assets and will be resuming services once they are unfrozen. The team also reassured users that all their funds and data on the platform were still secure and untampered. As a result of the trading suspension, all unfulfilled orders will be canceled. Furthermore, all leveraged exchange-traded fund (ETF) positions will also be forcibly liquidated as per their values at 12:00 UTC on August 10. Income from users’ investment products is going to be distributed normally. The team also promised to announce a compensation plan for users once the platform resumes operation.
Previous Service Suspension
This is not the first time the Hotbit crypto exchange has had to suspend operations. Back in April 2021, the Hong Kong-based exchange fell victim to a cyberattack that compromised its user database. Following the attack, the platform had to temporarily shut down to recover from the damages of the hack. The team embarked on a plan to rebuild all of its 200+ servers to impose stricter security measures involving the accurate reconstruction of all user data.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.