Hong Kong-based crypto exchange BitForex has unexpectedly halted withdrawals for over three days, leaving users in the dark about the reasons behind the suspension. Prior to the halt, approximately $56 million worth of cryptocurrencies had been withdrawn from the exchange's wallets.
Withdrawal Suspension and Lack of Communication
According to on-chain investigator ZachXBT, three of BitForex's hot wallets experienced outflows totaling around $56.5 million in cryptocurrencies before the exchange abruptly stopped processing transactions. Users have reported various issues with their accounts, such as being unable to access them or encountering empty dashboards. Some users even received notifications blocking them from accessing the exchange's website.
Concerns and Regulatory History
BitForex's X account has not been updated since May 2023, raising concerns about the exchange's current status and operations. In the past, the exchange faced scrutiny from Japan's Financial Services Agency (FSA) for allegedly operating in the country without proper registration, indicating a history of regulatory challenges.
Lack of Live Data and Transparency
Despite being a leading global crypto exchange in September 2023 with a daily trading volume of $2.6 billion, BitForex's current status remains unclear. CoinMarketCap no longer provides live data on BitForex, and attempts to access the exchange's website have been met with difficulties.
Similar Incidents in the Industry
This incident echoes similar situations in the industry, such as the case of Atom Asset Exchange (AAX), another Hong Kong-based exchange that ceased operations and reportedly moved $55.6 million worth of Ether from its wallets. Following AAX's shutdown, its former executives were arrested, but the founder remains at large with access to users' funds.
Conclusion
BitForex's withdrawal suspension and lack of communication have raised concerns among users and the broader crypto community. As the situation unfolds, affected users await further updates from the exchange regarding the resumption of withdrawals and the safety of their assets.
Seeing some suspicious activity with the crypto exchange @bitforexcom.
— ZachXBT (@zachxbt) February 26, 2024
On Feb 23 their hot wallets saw outflows of ~$56.5M. Shortly after this time withdrawals stopped processing with no official announcements having been made since.
Currently users are asking questions on… pic.twitter.com/gFEcwExHKh
