Crypto exchange Hotbit has announced a suspension of trading, deposit, withdrawal and funding functions as of 10 a.m. ET on Wednesday.
The suspension comes amid an ongoing investigation into a former management employee's involvement in a project in 2021, that is alleged of violating criminal laws, according to an announcement posted on the company's website.
Hotbit did not reveal information about the investigation or the identity of the employee, only saying that they “left Hotbit in April this year.”
It also said that several senior managers have been subpoenaed by law enforcement since the end of July and are assisting in the investigation.
Hotbit said in the blog post that the company and other employees did not have knowledge about and were not involved in the project in question.
“Law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally,” the firm wrote, adding that the assets and data of all users are safe. Hotbit said that it has applied to the law enforcement to release the frozen assets.
It did not detail which jurisdiction the investigation is being carried out in.
According a separate announcement, the Shanghai and Taipei-based exchange will cancel open order during the suspension. It will also forcibly liquidate all users’ leveraged exchange-traded fund (ETF) positions by 12 p.m. UTC on Wednesday to prevent the loss by holding the positions. Despite the suspension, Hotbit is still distributing the income of investment products to users.
Hotbit was founded in 2018 and registered in Hong Kong and Estonia. According to the firm's website, it has more than 1 million registered users from more than 170 countries.
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