Lots of crypto exchanges are collapsing, its not trending in the news like it used to be because, its a sad trend we are tired of seeing, but its becoming rampant. Before the FTX big collapse, we were quick to judge other companies when they collapse because we think they are too small, too illiquid and not popular enough to not collapse, until the FTX collapse came. Now people know that its not about how big, or how popular it is, as a matter of fact, its not a matter of how liquid it is, but how good the company is in managing their customers funds and protecting it. Because, FTX was so big, it was competing against Binance, it was so liquid it was buying other companies, and using top celebrities as brand ambassadors, but, their customers funds, and customers investment were misused and mishandled which led to the company’s collapse.
Most of these companies are collapsing but won’t tell the public, lots of crypto exchanges have collapsed with people’s funds in it, some of these customers and investors have been lucky enough to get their money back while some were unfortunate to not. But seeing the hotbit update and giving customers the opportunity to withdraw their funds before a specific time seemed like a very nice thing to do. An ethical thing to do, the company communicated fairly and didn’t sugar coat anything. If you could remember, hours before FTX declared bankruptcy, SBF tweeted that everything was fine and under control. Withdrawals were deactivated after, because the demand was too much and FTX had exhausted customers funds.
Allowing customers to withdraw their funds before shutting down is actually the right thing to do, and its the bare minimum, but due to the fact other crypto exchanges collapse and don’t give customers the opportunity to withdraw their funds, the bare minimum is seen as a very big deal. This is the reason most people are migrating to decentralised platforms, and more reasons more crypto exchange regulations are being introduced, at least regulators will set some criteria that must be met before crypto exchanges launch. Although this will come with a lot of government policies that will affect the policies of crypto user’s freedom and privacy.