Withdrawals have been halted on the Hong Kong-based cryptocurrency exchange BitForex for an indefinite period of at least three days, with no explanation provided for the suspension. Prior to the suspension, approximately $56 million in cryptocurrency had been withdrawn from exchange wallets, according to findings by on-chain investigator ZachXBT in a post on February 23. Notably, three BitForex hot wallets witnessed an outflow totaling around $56.5 million in cryptocurrency just before the exchange ceased transaction processing.
Users of BitForex encountered various issues with their accounts, as reported on the exchange's official Telegram channel. These issues ranged from inability to access accounts to dashboards failing to display any assets. Some users also reported receiving pop-up messages indicating they were blocked from accessing the company's website. However, certain pages of the exchange’s website, such as the announcement of former CEO Jason Luo's departure on Jan. 31, remained accessible at the time of reporting.
Despite being one of the world’s leading cryptocurrency exchanges by market capitalization in September 2023, with a daily trading volume of approximately $2.6 billion, BitForex currently lacks real-time data availability on CoinMarketCap. The exchange has faced regulatory scrutiny in the past, notably in April 2023 when Japan’s Financial Services Agency (FSA) accused BitForex of violating the country’s funds settlement law. Additionally, the UK Financial Services Authority has cited the exchange for operating in the country without proper registration.
While BitForex has not been under significant regulatory or media spotlight since the aforementioned incidents, recent developments raise concerns about the exchange's operational integrity. The situation parallels a similar event involving another Hong Kong-based exchange, Atom Asset Exchange (AAX), which transferred around $55.6 million worth of ether from its wallet last week. AAX ceased operations on November 13, 2022, shortly after FTX filed for bankruptcy. Following AAX's shutdown, former CEO Thor Chan and board member Leung Ho-ming were arrested by Hong Kong police in 2022, while the exchange's founder remains at large, reportedly holding user funds worth HK$230 million ($29.41 million) and possessing private keys with access to the exchange’s wallet.
