Seventeen days ago, Hotbit announced that they were ‘taking a bow’ out of the crypto space. After running for 5 years and four months, the team felt that it was time to take a rest. Hotbit put out a blog post on the same day.
Here is what you need to know about the developing story.
Hotbit Quit Because of Three Major Reasons
According to their official blog announcement (which was updated 37 minutes ago as of the time of writing this at 9:00 AM UTC), the company quit operations because of three major reasons:
- Deterioration of the operating conditions.
- Changes in the crypto industry trend.
- Industry uncertainty poses many risks.
The team asked the users to withdraw their remaining assets before June 21, 2023, UTC 04:00. But there is a problem. A company that is planning to shut down services still openly listed a token less than one week before the shut-down announcement.
While it may have not raised any eyebrows at that time, it now is sparking discussions. The crypto exchange gave users 30 days grace period to withdraw funds, but the majority have not received their funds despite requesting a withdrawal.
Is Hotbit Planning an Exit Scam?
The exit sounds respectful but from the facts on the ground it is anything but. The largest asset on Hotbit is USDT, however, they have only allowed the withdrawal of ERC20 USDT. On top of that, the fee for withdrawing the USDT is a whopping $48.
In their defense, they claim the astronomical fee is the effect of network conditions. This, however, couldn’t be further from the truth since according to Etherscan’s gas tracker, it only costs $2.48 (as of Thu, 08 Jun 2023 06:16:27 UTC) to transfer USDT on mainnet Ethereum.
Users from other projects have also complained that they have not received their funds. Here are some of the users’ comments on Twitter.
Hotbit asked me to drop address since two week ago for refund. As I speak, nobody dey answer me for the group. Someone has been trying to take out his 300B WKC. Always keep 80% of your WKC in your decentralised wallet if you can, to avoid stories that touch.Sir Mapy, Wikicat Coin Founder
@Hotbit_news my $DFusdt 1447$ When will you give me that withdrawal?Will you give me that withdrawal within 21 June month?For a year I have been hearing that the withdrawal will giveSoumen Maji, Twitter User
Hotbit withdrawal fee @ $48.2205usdt while trust wallet fees are at $4.27usd for the erc20 network. They’re scamming their own customers by forcing them to withdrawing on erc20 network while bagging the remaining 90% of fees. Looks like their exit plan to fill the pockets.Jonathan Hendricks, Twitter User
There are only 13 days remaining until June 21. So far they’ve shut down support, closed Twitter replies, deleted HotBit Reddit, and disabled Telegram comments. All this may be intended to silence customers.
If Hotbit does not resolve this soon, we might have quite a substantial exit scam on our hands. All this is happening in the backdrop of Binance facing a serious lawsuit by the SEC. Read more about it here:
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.