Cryptocurrency trading platform Hotbit has announced that it will cease all operations on May 22 after being active for more than five years.

Hotbit has asked its users to withdraw their assets by June 21.

Why is Hotbit Store closed?

officially statementHotbit said it was shutting down due to deteriorating operating conditions. Besides the drop in cash flow, he also blamed a shift in crypto sentiment and a tightening of regulations.

“The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to adhere to, whether for compliance or decentralization, and are unlikely to meet long-term trends.”

Hotbit also described the many difficulties it was facing. It outlined the cyber attacks and losses caused by the project’s defects. In August last year, one of the platform’s employees faced a criminal investigation, which forced the exchange to suspend operations for weeks.

After recovering from the FTX crash, cryptocurrency market liquidity has struggled over the past four weeks. In its latest report, CoinShares notice Those crypto investment products saw $200 million in outflows over the past month.

Cryptographic rules change direction

According to its website, Hotbit has licenses in Hong Kong and Estonia. However, Hotbit decided to shut down the company at a critical time. A new licensing regime for virtual asset service providers will come into force in Hong Kong on June 1. It is a decision aimed at allowing regular investors to trade major crypto assets.

Meanwhile, a large number of other cryptocurrency platforms have left Estonia. After the passage of a new law to prevent money laundering and terrorist financing, nearly 200 cryptocurrency exchanges in Estonia recently withdrew their applications. The deadline for companies to renew their licenses was June 3.

Most major economies in the world are gradually implementing cryptocurrency rules. The Market in Crypto Assets Act (MiCA) has been ratified by every member of the European Union, even if US agencies are not present in the region. Meanwhile, the UK is also trying to establish a positive presence on the regulatory front.

India proposed a single framework for G20 countries to deal with cryptocurrencies, while Hong Kong, the United Arab Emirates and Singapore offered more familiar global crypto capabilities. If a decision is taken in the legislative direction, it could be very important given that this year’s G-20 summit is chaired by an Asian country.