BitForex, Crypto Exchange Failed to Respond & Halted Withdrawals

BitForex, a Hong Kong-based crypto exchange, has suspended withdrawals for at least three days without warnings or explanation.

Before the halt, around $56 Million in crypto had been withdrawn from the exchange’s wallets. On February 23, on-chain sleuth ZachXBT shared an X (formerly Twitter) post, where he said that three BittForex hot wallets saw outflows of around $56.5 Million in cryptocurrencies before the exchange stopped processing transactions.

Problems Faced by Users

Previously, the exchange had not made any updates since May 2023. On its Telegram channel, the users of BitForex were reporting problems with their accounts. The reported issues varied from the inability to enter their accounts to the dashboard not showing any assets.

Several users shared a pop-up screen showing they were blocked from accessing the company’s website, although, the web pages are still functional. On January 31, it was announced that BitForex CEO Jason Luo had left the company.

Instances of the complaints

One user reported they have roughly 43,000 USDT along with other tokens locked on their BitForex account and expressed frustration on Telegram, stating,

“Dear respected admin,, mona sir this,, side i m from india assam state .i m belonging very poor family. I have 43000usdt and 4k wild coin and others 8more coin 56k in bitforex. i m very sad now why my all assets are zero.”

Another user posted, 

“What happens to our trades is what I want to know? Were they closed with the maintainance? Are all my funds liquidated now? Coins dropped 10%+ since yesterday and I’ve had multiple trades opened… will I loose all funds?”

However, the BitForex team has not responded to users. The current post has gained popularity but the website is still down.

Previously, in September 2023, BitForex was the leading global crypto exchange in terms of capitalization. Its daily trading volume stood at about $2.6 Billion in crypto. Currently, CoinMarketCap does not provide live data on BitForex.

In April 2023, Japan’s Financial Services Agency (FSA) charged BitForex with violating the country’s fund settlement laws. As per the data released by FSA, the exchange had been conducting business in the country without proper registration. BitForex hasn’t drawn any significant attention from regulators or the media.

Similar Events in the Industry

Last week, another Hong Kong-based exchange, Atom Asset Exchange (AAX), moved around $55.6 Million worth of Ether from its wallets. The Exchange halted all its operations on November 13, 2022. In the next two days, FTX filed for bankruptcy. After this, Hong Kong police arrested Thor Chan, the former CEO of AAX and board member Haoming Liang.

The identity of the founder of AAX is still anonymous. It is still on the run with 230 Million Hong Kong dollars, equivalent to $29.41 Million in USD worth of users’ money and private keys holding access to exchange wallets.

Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.