Holders of the Shiba Inu tokens rushed to get their funds out from Hotbit after the Chinese crypto exchange urged investors to withdraw their tokens before June 21 at 04:00 UTC
Just a few days back, the trading platform with 5 million users worldwide, announced to shut down operations, an indicator of its worsening condition.
According to a blog post, the probe in August 2022, when Hotbit management teams were compelled to cease operations for several weeks, was one of the events that contributed to the decision.
Second, the shift in the crypto sector ranging from the collapse of FTX to bank crises spurred massive fund outflows from CEX which in turn had a negative impact on Hotbit’s cash flow.
The Hotbit team believes that centralized exchanges [CEX] are becoming increasingly cumbersome, with highly complex and interconnected businesses that are difficult to comply with, whether for compliance or decentralization, and are unlikely to meet long-term trends.
In addition to the above issues, the exchange suffered numerous other problems, such as repeated cyber attacks and the exploitation of project defects by malicious users, resulting in significant losses.
“Therefore, the Hotbit team believes that the operation model of supporting a diverse range of assets is unsustainable from a risk management standpoint,” according to the post.
Notably, Hotbit was among the first exchanges to list a variety of new assets, such as SHIB, KSM, GRIN, and others. It was also the first to offer staking services starting with ATOM and the first to undertake Defi mining utilizing Compound.
Shiba Inu tokens, on the other hand, have caught the attention of whales as around 40 billion SHIB tokens have been transferred between the biggest cryptocurrency trading platforms, data from Etherscan showed.
Shiba Inu Continues To Be Whales’ Favourite
In just 1 hour, a total of six significant transactions were spotted, most of which involved 6 or 6.4 billion Shiba Inus that were moved by unidentified large-scale holders.
Also recently, Lucie Sasnikova, a key member of the meme token ecosystem cautioned investors looking for a rapid pump amidst SHIB’s layer 2 impending mainnet launch.
Even once the platform is launched, Sasnikova stressed that it may take months for it to become established in the market because prices are not driven that way.