The China-based exchange Hotbit announced its assets were frozen due to an ongoing investigation of the company, and it had to suspend all trading, deposit and withdrawal functions until its assets were released.
An Aug. 10 post on the company's website stated :
The exchange ensured that all of its customers' funds are safe and secure, and will return to business as usual as soon as the investigation is over.
A management-level employee was involved in a project in 2021 that the law enforcement suspects have violated criminal laws, according to the announcement.
Hotbit claims that the project was against the company's internal principles, and the managers involvement in this project was not known to Hotbit. The investigation started on the suspected project, but it turned out to Hotbit because of its ties to Hotbit's former manager. The announcement clarified that no other Hotbit employees have played a part in the investigation. They have been assisting the ongoing investigations since July 2022. The exchange did not run normally because of the frozen assets, which was the reason it got some of its assets frozen.
The Hotbit team ensured that the assets were secure. The post stated :
The exchange said it was working on a compensation plan for its users to publish soon. The net values on 12 PM UTC, Aug. 10, are used to liquidate all leveraged ETF positions, as well as prevent losses due to holding positions.