It’s Now Too Difficult To Run a Centralized Crypto Exchange, Says Hotbit As It Shuts Down

May 22, 2023 The Daily Hodl

Crypto Exchange Hotbit Suspends Service After Law Enforcement Freezes Its Funds, Subpoenas Senior Managers

August 12, 2022 Bitcoin.com

Crypto exchange Hotbit says it froze customer funds due to alleged criminal ties of formal employee

August 10, 2022 Coin Telegraph

It's not yet clear how the alleged criminal misconduct of a former employee led to a law enforcement freeze on users' funds.

On Thursday, cryptocurrency exchange Hotbit said it "suspended trading, deposit, withdrawal and funding functions," with no timeframe for resumption. In explaining the decision, Hotbit stated:

"A former Hotbit management employee who left in April this year was, unbeknownst to Hotbit, involved in a project in 2021 that law enforcement authorities now think is suspected of violating criminal laws. As a result, a number of Hotbit senior managers have been subpoenaed by law enforcement since the end of July and are assisting in the investigation. Furthermore, law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally."

The firm further claims that the remainder of its employees are not involved in the project and possess no knowledge of the alleged illicit activities. With regards to the frozen assets, Hotbit says:

"The assets of all users are safe on Hotbit. Hotbit will resume normal service as soon as the assets are unfrozen. All user's assets and data on Hotbit are secure and correct. However, we are still actively cooperating with the law enforcement authorities in their investigations and are continuously communicating with them through our lawyers and applying for the release of funds."

Hotbit is currently headquartered in Hong Kong. As a result of the trading freeze, all unfilled orders will be canceled, and all leveraged exchange-traded fund positions will be liquidated. Meanwhile, Hotbit claims that the income of users' investment products will be distributed normally and that a "compensation plan" for users will be published when the website is resumed. In the past 24 hours, Hotbit processed $25.6 million worth of digital asset transactions.

Hotbit Exchange Halts Trading as Authorities Probe Ex-Employee

August 10, 2022 The Crypto Briefing

Moma Protocol Trading Opens on Tuesday July 6, Followed by IDO on Bounce, WeStarter & IEO on HotBit

July 6, 2021 The Crypto Briefing

Shanghai Man: VeChain on TV, DOGE flips BTC volume, Hotbit hack and more …

May 6, 2021 Coin Telegraph

Bitcoin

DOGE leading in volume and search hits, VeChain’s blockchain solution on state run CGTN, and HOO launches a smart chain of its own

This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects, changes in the regulatory landscape, and enterprise blockchain integrations.

Will DOGEmania ever stop?

Dogecoin has officially flipped Bitcoin in a few categories here in China, with DOGE trading volume on leading Chinese exchange Huobi surpassing that of leading assets ETH and BTC. On May 6th, according to CoinGecko, DOGE volume made up more than 15% of total exchange volume, whereas BTC and ETH were around 8% each. Searches for ‘Dogecoin’ on WeChat surpassed searches for Bitcoin, with 2.3 million versus 1.7 million on May 5th. Dogecoin has become increasingly appealing to the Chinese retail community since earlier this year as many are attracted to the virality and get-rich-quick potential of the colorful DOGE community.

Hacking attempt fails, but causes a major ruckus

Centralized exchange Hotbit was the victim of a hacking attempt on April 30th. The good news was that assets appear to be safe on the platform. The bad news was that user data was compromised, leading to a corrupted database. Trading, deposits and withdrawals have all been paused while the exchange attempts to restore normality. The Chinese exchange has been communicating actively via Twitter, with the interrupted service lasting potentially another week. Hotbit is well known for listing a diverse range of assets, making it a popular spot among more risk averse investors.

Shenzhen-based HOO launches Smart Chain contender

Hoo.com became yet another exchange to launch an Ethereum Virtual Machine, or EVM-based, smart chain, attempting to bridge their CeFi users into the DeFi space. The chain, currently in testnet, boasts low fees of just 0.001 USD per transaction and over 500+ transactions per second, as well as compatibility with Ethereum, BSC, and HECO. Since the start of the year, Hoo’s token has increased by over 350%. Other Chinese exchanges, including OKEx and Gate, have also launched smart chains. Smart chains are proving an attractive way to let users maximize yield while still letting the exchange capture value from the process.

VeChain on national TV

English-language and state-run business channel CGTN created a short expository video on blockchain’s growth post-COVID19. The video and article featured a close look at VeChain’s progress in developing business solutions, explaining how the technology could be applied to the food safety and infection control industry. The media company shot a short video inside the office and interviewed a few of the developers, indicating that the company has done well to comply with regulatory requirements in the tightly run country. It’s no secret that VeChain has a top position and close relationship with many government backed organizations, which is an enviable position for any enterprise Blockchain-as-a-Service provider.

Rising salaries for blockchain devs

The Beijing Human Resources and Social Security Bureau recently released the 2021 Beijing Human Resources Market Salary Survey Report (First Quarterly)". According to the report, new and hot jobs, which included the tech space, had a median average monthly salary mainly in the $3,000 to $4,600 range. Blockchain engineers comfortably eclipsed that with a wage of $6,700 per month, showing the growing demand for the skills. By contrast, the average annual salary of a blockchain developer in the U.S. often exceeds $12,500 per month, according to recruitment firm Hired.com, nearly double the going rate in Beijing.

Miners back up and running... away?

Mining appears to have resumed as normal following the outages after a deadly coal mine accident last month. The incident required rigorous inspections of mining facilities, forcing many ASIC miners to turn off their machines. Hashrates have currently recovered to near the rates they were prior to the incident in the middle of April. One interesting shift, however, is that the industry appears to be gradually shifting from China to North America. F2Pool founder Chun Wang noted that for the first time in 8 years, more than half the BTC hashing power was coming from outside of China. This may have been partially tied to the incident, but is a trend that many experts are following as mining regulations in China appear to be growing stricter.

Cryptocurrency Exchange Hotbit Hacked: Systems Paralyzed, 2 Million Users Affected

May 1, 2021 Bitcoin.com

Hotbit crypto exchange shuts down for maintenance after attempted hack

April 30, 2021 Coin Telegraph

Coin Telegraph

The Chinese crypto exchange says funds are “SAFU” and that the emergency maintenance could take up to two weeks.

Cryptocurrency exchange platform Hotbit has shut down all of its services after an attempted cyberattack on Thursday.

“Hotbit just suffered a serious cyber-attack starting around 08:00 PM UTC, April 29, 2021, which led to the paralyzation of a number of some basic services,” a notice on the platform’s website reads.

The hackers were reportedly unsuccessful in gaining access to Hotbit’s wallets but did manage to compromise the platform’s user database. Thus, the Hotbit team has advised customers to disregard any communication from entities claiming to be representatives of the exchange.

With all normal operations currently paused during the ongoing maintenance, Hotbit also revealed that pending trading orders are canceled to prevent losses. Also, the exchange promised to bear any losses stemming from exchange-traded funds listed on its platform during the duration of the maintenance.

According to the Hotbit announcement, the maintenance will last for at least seven days with reports that the investigation and system upgrade could take as long as two weeks.

Addressing users on the exchange’s Telegram group, Alex Zhou, chief security officer of Hotbit, revealed that user funds were unaffected by the attack, stating: “The attacker tried to break into the wallet server to steal funds but the action was identified and blocked successfully by Hotbit risk control system. All users’ funds are safe.”

“At the same time, Hotbit is in the process of transferring all funds in hot wallet to cold wallet, the details of the whole integration could be seen on the chain,” he said.

Indeed, data from Ethereum transaction monitoring tool Etherscan shows multiple token outflows from one of Hotbit’s known wallets to another address that currently holds about $14 million in several altcoins.

However, the length of time given for the maintenance is causing significant unrest among Hotbit users judging by comments on social media and in the platform’s Telegram channel.

Fears over the incident being an exit scam by the Hotbit team are palpable. Earlier in April, two major exchanges in Turkey went offline, with their executives fleeing with millions of dollars in user funds. Both incidents have led to sweeping arrests by law enforcement agencies as well as plans by the government to establish a central custodian bank for cryptocurrency exchanges in Turkey.

Hotbit