In a surprising move, the Hong Kong-based crypto exchange BitForex has suspended withdrawals for an unspecified period, leaving users puzzled. This decision came without any explanation from the exchange’s management.
Just before the suspension, a substantial amount of approximately $56 million in cryptocurrency was withdrawn from BitForex’s wallets.
On February 23rd, ZachXBT, an on-chain sleuth, reported that three of BitForex’s hot wallets experienced outflows totaling around $56.5 million in various cryptocurrencies. These outflows occurred just before the exchange ceased processing transactions.
BitForex’s official Telegram channel has been flooded with user complaints regarding various account-related issues. Many users reported being unable to access their accounts or view their assets on the dashboard. Notably, the exchange’s X account has not seen any updates since May 2023.
Attempts to access the BitForex website have been met with difficulties, with users encountering similar issues as with their accounts. While some pages remain accessible, key functionalities are impaired.
In April 2023, Japan’s Financial Services Agency (FSA) accused BitForex of operating in violation of the country’s fund settlement laws by conducting business without proper registration. Despite this incident, the exchange has largely avoided regulatory and media scrutiny since then.
This suspension echoes similar issues faced by another Hong Kong exchange, Atom Asset Exchange (AAX), which ceased operations in November 2022 following FTX’s bankruptcy filing. Allegations of financial impropriety have since emerged, with AAX’s founder purportedly absconding with millions of dollars in user funds and access to exchange wallets.
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