Crypto Trading Platform Hotbit Suspends Service Amid Criminal Investigation Into Former Employee
The person worked for the platform until April, and was involved in an external project suspected of violating criminal laws.
Hotbit has suspended crypto trading, deposits and withdrawals because law-enforcement authorities have frozen some of the firm's funds during a criminal investigation into a former employee.
The company declined to identify the jurisdiction when contacted by CoinDesk.
The employee in question worked for the platform until April. Last year, the person was involved in an external project, contrary to the firm's guidelines, that is now suspected of violating criminal laws, Hotbit said Wednesday.
"Law enforcement has frozen some funds of Hotbit, which has prevented Hotbit from running normally," the company said. "Hotbit will resume normal service as soon as the assets are unfrozen." Users' assets are safe, it said.
Several Hotbit senior managers, who were not involved in the project, have been subpoenaed to assist with the investigation.
Hotbit is registered in Hong Kong and Estonia with most of its staff from China, Taiwan and the U.S., according to its website.
All unfulfilled open orders will be canceled to prevent losses and all leveraged exchange-traded fund (ETF) positions will be forcibly liquidated according to their values at 12:00 UTC Aug. 10.
Hotbit has a 24-hour trading volume of $350 million, according to CoinMarketCap data.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.