Another one bites the dust! But this one's different. The Hotbit case.

dansus021

copper member

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Part of AOBT - English Translator to Indonesia

Quote from: bbc.reporter on May 24, 2023, 12:51:25 AM

What was the result of the criminal investigation on the exchange? Some questions being asked in social media are which country's regulator is investigating this case, what laws were broken, in which country did this occur, and what is the name of the employee?

However, the more important outcome from this is the depositors get their funds back.

I am former Hotbit User Maybe Hotbit comes from china or HongKong, there is actually similar case with china based exchange I didn't remember the exchange name, there is Bit in front of their exchange they exit scam with the same as hotbit did they said that china police seized all their asset and cannot return user deposit and the company is long gone by now.

Although what we know that hotbit give around 1 mont for us user to withdraw money but Last i checked that the withdraw button for btc usdt and eth is disabled https://bitcointalk.org/index.php?action=merit;msg=62286339 but I don't check it again

bbc.reporter

legendary

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Quote from: Who is John Galt? on May 22, 2023, 04:06:20 AM

The Hotbit exchange has just announced its final closure and has asked users to withdraw all their funds by June 21, UTC 04:00.

https://hotbit.zendesk.com/hc/en-us/articles/14750194236823

Quote

Dear Hotbit users,

For 5 years and 4 months, the Hotbit team has been proud to participate in a wonderful crypto show with 5 million users. However, it is with great regret that we have made the decision to stop all CEX operations from May 22, UTC 04:00. We kindly ask all users to withdraw their remaining assets before June 21, UTC 04:00.

This decision is based on three reasons:

Firstly, the deterioration of the operating conditions. After the Hotbit management team was forced to suspend operations for several weeks due to the investigation in August 2022 (https://hotbit.zendesk.com/hc/en-us/articles/8074249353495), the industry has experienced a series of crises, including the collapse of FTX, bank crises causing USDC off-peg incidents, resulting in continuous outflows of funds from CEX users, including Hotbit, and deteriorating cash flow.
Secondly, the change in the crypto industry trend. The successive collapse of large centralized institutions has led the industry to gradually in two ways: either embrace the regulation or become more decentralized. The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization, and are unlikely to meet long-term trends.
Since its beginning, Hotbit has been characterized by providing a rich variety of assets and value-added methods. Hotbit was the first exchange to list numerous emerging assets, including SHIB, KSM, GRIN and so on, and was the first to offer staking services starting from ATOM, as well as the first to conduct Defi mining business using Compound. However, due to the industry's uncertainty, various opportunities also contain many risks. Hotbit has also suffered numerous problems, such as repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses. Therefore, the Hotbit team believes that the operation model of supporting a diverse range of assets is unsustainable from a risk management standpoint.
That’s all, with so many joys and tears, our show is over. We want to say thank you and take a bow now. We still believe a bright future about crypto innovation and some of us will still fight for it.

What was the result of the criminal investigation on the exchange? Some questions being asked in social media are which country's regulator is investigating this case, what laws were broken, in which country did this occur, and what is the name of the employee?

However, the more important outcome from this is the depositors get their funds back.

Who is John Galt?

sr. member

Activity: 308

Merit: 274

The Hotbit exchange has just announced its final closure and has asked users to withdraw all their funds by June 21, UTC 04:00.

https://hotbit.zendesk.com/hc/en-us/articles/14750194236823

Quote

Dear Hotbit users,

For 5 years and 4 months, the Hotbit team has been proud to participate in a wonderful crypto show with 5 million users. However, it is with great regret that we have made the decision to stop all CEX operations from May 22, UTC 04:00. We kindly ask all users to withdraw their remaining assets before June 21, UTC 04:00.

This decision is based on three reasons:

Firstly, the deterioration of the operating conditions. After the Hotbit management team was forced to suspend operations for several weeks due to the investigation in August 2022 (https://hotbit.zendesk.com/hc/en-us/articles/8074249353495), the industry has experienced a series of crises, including the collapse of FTX, bank crises causing USDC off-peg incidents, resulting in continuous outflows of funds from CEX users, including Hotbit, and deteriorating cash flow.
Secondly, the change in the crypto industry trend. The successive collapse of large centralized institutions has led the industry to gradually in two ways: either embrace the regulation or become more decentralized. The Hotbit team believes that centralized exchanges (CEX) are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization, and are unlikely to meet long-term trends.
Since its beginning, Hotbit has been characterized by providing a rich variety of assets and value-added methods. Hotbit was the first exchange to list numerous emerging assets, including SHIB, KSM, GRIN and so on, and was the first to offer staking services starting from ATOM, as well as the first to conduct Defi mining business using Compound. However, due to the industry's uncertainty, various opportunities also contain many risks. Hotbit has also suffered numerous problems, such as repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses. Therefore, the Hotbit team believes that the operation model of supporting a diverse range of assets is unsustainable from a risk management standpoint.
That’s all, with so many joys and tears, our show is over. We want to say thank you and take a bow now. We still believe a bright future about crypto innovation and some of us will still fight for it.

Bitstar_coin

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Undeads.com - P2E Runner Game

It is not news that hotbit is among the shadiest exchange in the crypto space. Trading or doing any crypto transaction there is not safe let alone keeping your asset for more than necessary.

The best way to interact with exchange like hotbit (if you must) is do your transaction and withdraw to your personal wallet ASAP. Once upon a time I use to have an account with them and was because i need to liquidate my alts assets which was only trading in hotbit.
Centralized exchange is not a place to hold an assets and hotbit is certainly among the worst of them all.

o_e_l_e_o

legendary

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Quote from: examplens on September 13, 2022, 04:58:59 PM

I understood that they somehow "lost" certain funds. there is no clear confirmation as to how this happened

It is as I explained above, here: https://bitcointalksearch.org/topic/m.60846298

They took the coins which users deposited to their platform, handed them over a single individual, and that individual then deposited them on another exchange under his own personal account. When the user in question was arrested for helping to run a scam, his private accounts (which included a bunch of funds belonging to individual HotBit users) were all seized.

Quote from: examplens on September 13, 2022, 04:58:59 PM

I'm not sure about that scenario, because I believe that now a large number of users will withdraw funds ^{if it is really possible} from there.

Anyone in their right mind will immediately withdraw any and all assets they are allowed to withdraw as soon as possible.

malcovi2

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Quote from: examplens on September 13, 2022, 04:58:59 PM

Quote from: malcovi2 on September 12, 2022, 08:11:21 PM

Part 2 update:
https://hotbit.zendesk.com/hc/en-us/articles/8794402090263-The-Latest-Announcement-of-Hotbit-Platform-Part-2

The Deficit system
https://hotbit.zendesk.com/hc/en-us/articles/5237407755031

What I understand from the deficit system is they are going to airdrop affected users with a shitcoin that they use to stake it in their ponzi service, feel free correct me if I am wrong.
They are running away from the responsibility of refunding their customer's assets they need a better compensation plan.

I understood that they somehow "lost" certain funds. there is no clear confirmation as to how this happened, nor did they say transparently how much the deficit is exactly. but they promise that all future profits will be used to cover this loss.
I'm not sure about that scenario, because I believe that now a large number of users will withdraw funds ^{if it is really possible} from there.

There was no promise of future profits to cover the losses but they will airdrop you hotbit token a useless shitcoin exchange for the amount of what you lost. Also I thought that withdrawals are suspended but the hotwallet is starting to move out big amounts of tokens and ethereum

https://etherscan.io/address/0x562680a4dc50ed2f14d75bf31f494cfe0b8d10a1#tokentxns

500,000 USDT and 200 ETH were withdrawn.

examplens

legendary

Activity: 3248

Merit: 3098

Quote from: malcovi2 on September 12, 2022, 08:11:21 PM

Part 2 update:
https://hotbit.zendesk.com/hc/en-us/articles/8794402090263-The-Latest-Announcement-of-Hotbit-Platform-Part-2

The Deficit system
https://hotbit.zendesk.com/hc/en-us/articles/5237407755031

What I understand from the deficit system is they are going to airdrop affected users with a shitcoin that they use to stake it in their ponzi service, feel free correct me if I am wrong.
They are running away from the responsibility of refunding their customer's assets they need a better compensation plan.

I understood that they somehow "lost" certain funds. there is no clear confirmation as to how this happened, nor did they say transparently how much the deficit is exactly. but they promise that all future profits will be used to cover this loss.
I'm not sure about that scenario, because I believe that now a large number of users will withdraw funds ^{if it is really possible} from there.

malcovi2

member

Activity: 1355

Merit: 67

Part 2 update:
https://hotbit.zendesk.com/hc/en-us/articles/8794402090263-The-Latest-Announcement-of-Hotbit-Platform-Part-2

The Deficit system
https://hotbit.zendesk.com/hc/en-us/articles/5237407755031

What I understand from the deficit system is they are going to airdrop affected users with a shitcoin that they use to stake it in their ponzi service, feel free correct me if I am wrong.
They are running away from the responsibility of refunding their customer's assets they need a better compensation plan.

examplens

legendary

Activity: 3248

Merit: 3098

Quote from: o_e_l_e_o on August 30, 2022, 05:05:16 AM

Quote from: stompix on August 29, 2022, 10:49:23 AM

So they stopped trading to avoid user losses, but magically somehow the whole balance is gone, this makes me think they've lost a lot of actual coins and if somebody would swap them now they would be left with negative balances. But, it's for the "love" of their customers.

This is why they are asking for loans or mergers. They know as soon as they re-enable withdrawals (if they ever do), they will experience a huge volume of withdrawals and end up experiencing a bank run. Without a loan, they will have to shut everything down again plus declare insolvency. They know they messed up bad and are trying to preempt the fall out. Co-mingling funds like this is unforgivable.

To be honest, I don't expect that everything will run smoothly after the hack, especially not withdrawals. Which does not make me happy, because I have a lot of funds there, fortunately, a small amount.
what is strange to me is that they separated the spot and trading wallets before this incident. I'm even more convinced that all this was planned.

o_e_l_e_o

legendary

Activity: 2268

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Quote from: stompix on August 29, 2022, 10:49:23 AM

With every tweet it's like a tennis match from the amateur team to the scammer team, after their anime crying gif came this thing:
https://twitter.com/Hotbit_news/status/1561739497129361408

Yeah, I don't understand this at all. The balance shown on customers' accounts is obviously just pulled from an internal database like every other centralized exchange or platform. There is no reason that everyone's balance should suddenly start displaying zero, I would have thought?

Quote from: stompix on August 29, 2022, 10:49:23 AM

So they stopped trading to avoid user losses, but magically somehow the whole balance is gone, this makes me think they've lost a lot of actual coins and if somebody would swap them now they would be left with negative balances. But, it's for the "love" of their customers.

This is why they are asking for loans or mergers. They know as soon as they re-enable withdrawals (if they ever do), they will experience a huge volume of withdrawals and end up experiencing a bank run. Without a loan, they will have to shut everything down again plus declare insolvency. They know they messed up bad and are trying to preempt the fall out. Co-mingling funds like this is unforgivable.

stompix

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Jambler.io

Quote from: o_e_l_e_o on August 29, 2022, 05:57:08 AM

At best, that is completely amateurish business practices, and at worst pretty much an outright scam.

With every tweet it's like a tennis match from the amateur team to the scammer team, after their anime crying gif came this thing:
https://twitter.com/Hotbit_news/status/1561739497129361408

Quote

Dear Users❤️
If the estimated value of your assets shows "0", please don't worry, it's because the trading function is suspended. Please rest assured, all your funds are safe.
It will be normal after our trading function is recovered.

So they stopped trading to avoid user losses, but magically somehow the whole balance is gone, this makes me think they've lost a lot of actual coins and if somebody would swap them now they would be left with negative balances. But, it's for the "love" of their customers.

As for this "Sheep" guy, that's a serious lack of imagination, instead of calling him "scapegoat", they went for sheep Grin

o_e_l_e_o

legendary

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Merit: 18509

Quote from: malcovi2 on August 29, 2022, 01:24:53 AM

this one really caught my interest:

Here's the full announcement: https://hotbit.zendesk.com/hc/en-us/articles/8477769193239

A different part of that caught my interest:

Quote from: https://hotbit.zendesk.com/hc/en-us/articles/8477769193239

At the same time, law enforcement froze various personal accounts of Sheep, including his/her private account on a large crypto exchange, which caused liquidity problems for Hotbit. The reason is: the account is not stored with Sheep's private assets, but with Hotbit's assets used for Market Making.

So the coins you were depositing to Hotbit were then being deposited at other exchanges, not under Hotbit's account or control, but under the name, account and control of a single private individual. At best, that is completely amateurish business practices, and at worst pretty much an outright scam.

The part about mergers and acquisitions seems like they setting up the scenario in which current users will only receive back some small proportion of their funds, all while clearing Hotbit to continue to operate and make profits of other unsuspecting users. Very suspect all round.

malcovi2

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there was a new update:

this one really caught my interest:

Hotbit team is currently looking for opportunities for mergers & acquisitions or loans. Our offer is: as long as the other party can ensure that 100% of all user funds could get redeemed, we are happy to discuss any other terms.

I think Hotbit has been a naughty kid using their clients money for their personal expenses and now they are lacking funds for liquidity.

fortunecrypto

legendary

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thecryptocurrency.directory

Quote from: Darker45 on August 10, 2022, 10:44:53 PM

All that's happening with centralized platforms recently makes me cringe. It chills me to the bone! If others are still trusting centralized platforms until now, it's time to rethink seriously.

This is not the first time and this will not be the last time besides this scenario hacking is very prevalent, these exchanges should understand that
the market is very dynamic and the price changes almost every minute, traders can make a profit from their trading but now that they hostage investors' funds they lose their chance to make a profit, this is one of the risks of a centralized exchange and people should think twice and be aware of the risk of sitting your coins in a centralized exchange, even if the exchange is popular the risks are still there.

o_e_l_e_o

legendary

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Quote from: Fivestar4everMVP on August 28, 2022, 07:35:22 AM

and one question i keep asking myself each time issues like this come up is "why always the users/investors who have to suffer the most loss in situations like this, even when the issue has nothing to do with the users/investors?"

Because those are the terms you agree to when you use these custodial platforms. Every single one of them will have a clause or clauses hidden somewhere in the terms of use or service which states that any and all coins you deposit to their platform cease to be yours, you give up all ownership rights to these coins and transfer full ownership to the platform, and the platform can do pretty much anything they like with those coins and you have absolutely no legal recourse whatsoever. And in the event of bankruptcy or similar, then you will be treated as an "unsecured creditor", which means you are literally the last person on the list to get back anything at all and that all the coins you deposited to the platform will preferentially be used to pay off the "secured creditors", which are usually banks and other large financial institutions.

The fact that 99% of people do not bother to read or understand these terms prior to signing up does not make them any less legally binding. If you don't want to lose your coins to these platforms, then the answer is very simply - stop using them.

Fivestar4everMVP

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Quote from: Darker45 on August 10, 2022, 10:44:53 PM

But why include all of the users' funds? Why the sudden freeze of the rest of the users' trading and withdrawal functions? Moreover, orders were all canceled. And, worse, "all leveraged exchange-traded fund positions will be liquidated." Finally, there's "no timeframe for resumption" of all activities.

First, I want to say that this is the first time I am coming across this news and I am highly surprised because I used the hotbit exchange to trade some altcoins some few days back, fortunately for me, (like I knew something like this was going to happen), I was really skeptical about leaving the money on there though I had no use for it at the time, I withdrew the money to my private wallet, and it is still there even as I type, now I imagined if I left that money on the exchange, by now, my funds would be frozen on an account of what I know nothing about.

Indeed - Not your key, Not your crypto!.

Quote

All that's happening with centralized platforms recently makes me cringe. It chills me to the bone! If others are still trusting centralized platforms until now, it's time to rethink seriously.

I totally agree with you mate, infact, i am more perplexed than you are right now, and one question i keep asking myself each time issues like this come up is "why always the users/investors who have to suffer the most loss in situations like this, even when the issue has nothing to do with the users/investors?"

libert19

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Quote from: AmoreJaz on August 18, 2022, 07:40:22 PM

Quote from: carlfebz2 on August 18, 2022, 07:34:29 PM

Quote from: libert19 on August 18, 2022, 03:10:40 PM

Hotbit, they have had habit of listing tokens left and right, then disable withdrawals abruptly. Was shady from start.

If people do make out some simple research at least then they might able to avoid this place or platform on the first place.

https://bitcointalksearch.org/topic/scam-hotbit-exchange-withrawal-not-working-5313616
https://bitcointalksearch.org/topic/hotbitio-is-big-scam-5180896
https://bitcointalksearch.org/topic/stay-away-from-hotbit-exchange-5113530

I was aware of this platforms name and able to hear off but i havent tend to make use of it
considering that i do always stick out on the best ones out there.

another reason why you need to get out your funds out of these exchanges once you finished your trading. this is true for all exchanges. we can't trust any trading platform these days. this is why it is always best to store your coins in your own wallet, with your own keys. i had used hotbit before, but once i finished trading my token, i immediately transferred my funds out of this exchange. i guess, people need a lot of lessons before they finally come to realize that they should not trust these exchanges.

You were lucky you got your funds transfered, often on these exchanges you lose your money the moment you deposit.

AmoreJaz

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Quote from: carlfebz2 on August 18, 2022, 07:34:29 PM

Quote from: libert19 on August 18, 2022, 03:10:40 PM

Hotbit, they have had habit of listing tokens left and right, then disable withdrawals abruptly. Was shady from start.

If people do make out some simple research at least then they might able to avoid this place or platform on the first place.

https://bitcointalksearch.org/topic/scam-hotbit-exchange-withrawal-not-working-5313616
https://bitcointalksearch.org/topic/hotbitio-is-big-scam-5180896
https://bitcointalksearch.org/topic/stay-away-from-hotbit-exchange-5113530

I was aware of this platforms name and able to hear off but i havent tend to make use of it
considering that i do always stick out on the best ones out there.

another reason why you need to get out your funds out of these exchanges once you finished your trading. this is true for all exchanges. we can't trust any trading platform these days. this is why it is always best to store your coins in your own wallet, with your own keys. i had used hotbit before, but once i finished trading my token, i immediately transferred my funds out of this exchange. i guess, people need a lot of lessons before they finally come to realize that they should not trust these exchanges.

carlfebz2

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Quote from: libert19 on August 18, 2022, 03:10:40 PM

Hotbit, they have had habit of listing tokens left and right, then disable withdrawals abruptly. Was shady from start.

If people do make out some simple research at least then they might able to avoid this place or platform on the first place.

https://bitcointalksearch.org/topic/scam-hotbit-exchange-withrawal-not-working-5313616
https://bitcointalksearch.org/topic/hotbitio-is-big-scam-5180896
https://bitcointalksearch.org/topic/stay-away-from-hotbit-exchange-5113530

I was aware of this platforms name and able to hear off but i havent tend to make use of it
considering that i do always stick out on the best ones out there.

libert19

hero member

Activity: 2464

Merit: 934

Hotbit, they have had habit of listing tokens left and right, then disable withdrawals abruptly. Was shady from start.

Topic: Another one bites the dust! But this one's different. The Hotbit case. (Read 544 times)