BitForex exchange ceases operations without users’ knowledge

BitForex, a Hong Kong-based crypto exchange, has suspended withdrawals and blocked its website since February 24, 2024. The platform has yet to provide any explanation, leaving its users in turmoil. The day before the shutdown, BitForex had withdrawn funds valued at $56 million. The exchange recently experienced regulatory troubles and the resignation of its CEO and founder.

BitForex: Withdrawals suspended, website blocked

Users of the crypto exchange BitForex don’t know which way to turn. Since February 23, 2024, the Hong Kong-based exchange has suspended fund withdrawals. What’s more, the platform’s website is inaccessible. When they tried to log on, several users saw on their screen : “Sorry, you’ve been blocked.” Coinpri tried to open the website of BitForex, in vain.

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Screenshot of home interface

In the crypto ecosystem, it happens that a platform suspends withdrawals or experiences difficulties accessing the site. Usually, these access difficulties are preceded or immediately followed by a communication from the platform. Unfortunately, this is not the case with BitForex. The exchange did not communicate about this incident either on its social networks or in the media. On the fourth day of the suspension of withdrawals, this lack of communication is unusual and worrying.

Suspicious outflows of funds before cessation of activities.

More than the lack of communication, it’s the transactions carried out before the exchange was shut down that have the greatest impact. BitForex that give cause for concern. According to Blockchain analyst ZachXBT, about 56.5 million were withdrawn from portfolios from BitForex shortly before it ceased operations. At present, it’s unclear whether BitForex’s hot wallets were hacked or whether the team deliberately emptied the cash register before fleeing.

This BitForex withdrawal is reminiscent of a similar scenario experienced in 2022 with another Hong Kong crypto exchange. Following the FTX collapse, the Atom Asset Exchange (AAX) platform withdrew around $55.6 million in Ethereum (ETH) from its portfolios. The exchange subsequently ceased trading. Its former CEO and a board member were arrested by the Hong Kong police in 2022.

From greatness to extinction: the appalling fall of BitForex

The difficult situation currently facing the BitForex platform was unforeseeable. Founded in 2018, BitForex managed to establish itself as one of the major players in the crypto ecosystem. By September 2023, the exchange had more than 3.5 million users in 200 countries. Its daily transaction volume sometimes reached $2.6 billion in crypto. Bitforex also holds 18% and 7% of the Tellor (TRB) and Ecomi (OMI) token offerings respectively.

Even so, the BitForex crypto exchange was not exempt from reproach. In 2019, a Chainalysis report claimed that BitForex was falsifying transaction volumes.

In recent times, the exchange has also experienced some regulatory problems. Last April, Japan’s Financial Services Agency (FSA) cited BitForex as one of the crypto exchanges violating the country’s laws on the settlement of funds. According to the FSA, BitForex was operating in the country without proper registration. It should be noted, however, that this regulatory problem is not likely to lead to the collapse of an exchange.

The cause of BitForex‘s troubles may well lie within the company. BitForex CEO Jason Luo announced his resignation on January 31, 2024, without giving a reason. He did, however, express his continued commitment to the company, saying he was willing to help the new management team guide BitForex towards even greater horizons. Clearly, this was not the case.

At this stage, all indications are that BitForex has vanished with its users’ funds. Lack of information on the closure of services, suspicious withdrawals on the eve of the cessation of activities, manipulation of transaction volumes, legal troubles, resignation of the CEO, … the facts that follow one another seem to leave no room for doubt. Until we know a little more, remember that without your keys, you don’t have your corners. Better opt for an efficient, smartly priced hardware wallet like D’Cent Wallet. Supporting 3,000 tokens on nearly 59 blockchain networks, there’s no reason to stick with a centralized exchange. 😉