Hotbit Suspends Activities Amid Employee Investigation

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  • Hotbit has suspended operations after some of its funds were frozen by law enforcement
  • The action is due to the investigation of a former employee on potential criminal charges
  • User funds are safe and the exchange is working to get them freed

Popular crypto exchange Hotbit has suspended key activities such as trading, deposits and withdrawals after an investigation was launched into a former employee who is alleged of violating criminal laws. Hotbit posted an announcement on its website yesterday to say that the individual, a “former Hotbit management employee”, was part of a potentially illegal project and a police investigation has been opened. This has led to senior management being interviewed and some of the exchange’s assets frozen.

Former Employee’s Secret Project

Hotbit is a well known exchange in the crypto space, and so the freezing of the exchange’s activities will come as an unwelcome shock to many. The company explained that the individual, who left the company in April, had in 2021 been involved in a project that “was against Hotbit’s internal principles and of which Hotbit was unknown” and which law enforcement authorities now believe may have violated “criminal laws”.

As well as the individual themselves being arrested, Hitbit reported that “a number of Hotbit senior managers have been subpoenaed by law enforcement” for the past two weeks or so in order to assist with the investigation, but of more immediate concern to Hotbit is the freezing of some if its funds, which it says has “prevented Hotbit from running normally”.

Echoes of Coinbase Insider Trading Case

Hotbit’s suspension comes a week after Coinbase’s former product manager Shan Wahi pleaded not guilty to insider trading, where he has been accused of passing over coin listing information to his brother and a third party.

Hotbit was clear to state that although the funds were frozen they were safe and that it was “continuously communicating” with law enforcement and “applying for the release of the frozen assets.”