A few hours after news broke that Hotfile had signed a $80 million settlement agreement with the MPAA, the file-hosting service has completely shut down. The drastic decision to deny access to millions of files without warning will come as a shock to the countless individuals who used Hotfile to store their personal and business documents. Hotfile has yet to comment on the controversial move which does nothing to help the image of cloud hosting providers.

Earlier today we reported that Hotfile and the MPAA have settled their legal dispute with a $80 million dollar settlement.

While the agreement left room for the file-hosting service to continue its operations by implementing a filtering mechanism, the company has decided to throw in the towel.

A few minutes ago the Hotfile site was replaced with an image with the following text:

“As a result of a United States Federal Court having found Hotfile.com to be in violation of copyright law the site has been permanently shut down. If you are looking for your favorite movies or TV-shows online, there are more ways than ever today to get high quality access to them on legal platforms.”

The notice in question is strikingly similar to the one isoHunt displayed last month following its defeat at the hands of the movie studios. The similarities suggest that both messages were drafted by the MPAA.

The decision to shut down the site without giving any notice whatsoever is causing problems among users and businesses who relied on Hotfile to store files and documents. Samsung firmware provider SamMobile, for example, has been forced to move its files to another hosting provider with a two day break in service.

“It will take at least 48 hours before we’re able to finish uploading all firmware, so do forgive us if you’re unable to get that firmware you wanted to download for the next couple of days,” SamMobile notes.

It’s unclear how many of the millions of Hotfile users stored files without a backup, but the number could easily run into the tens of thousands.

TorrentFreak has reached out to Hotfile to ask whether the company will offer a solution for affected users, but we have yet to hear back.

Following the Megaupload debacle early 2012 this is the second major blow for a US-linked cloud hosting provider. Needless to say, the recent events have put a serious dent in users’ trust, which may ultimately hurt the industry overall.