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 an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.