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Cryptocurrency exchange BitForex halts withdrawals amidst controversy

TL;DR

  • BitForex stopped withdrawals, causing user access issues amidst $56 million in outflows.
  • Regulatory concerns linger since Japan’s FSA accused BitForex in April 2023.
  • BitForex’s situation resembles AAX’s closure, prompting questions about management and regulations.

BitForex, a prominent cryptocurrency exchange based in Hong Kong, has initiated a suspension of withdrawals for a minimum of three days, leaving users in a state of uncertainty. The abrupt halt comes amidst a flurry of concerning developments surrounding the exchange’s operations and management.

Withdrawal suspension and alleged outflows

BitForex’s decision to suspend withdrawals follows a series of troubling events, including the withdrawal of approximately $56 million in cryptocurrency from the exchange’s wallets before the suspension. On-chain investigator ZachXBT reported that three of BitForex’s hot wallets experienced outflows totaling around $56.5 million before transaction processing was halted. This sudden move has left users grappling with various issues, from being unable to access their accounts to encountering empty asset dashboards.

Adding to the confusion, BitForex’s X account has not seen any updates since May 2023, raising questions about the exchange’s communication and transparency practices. Furthermore, regulatory concerns have loomed over BitForex since April 2023 when Japan’s Financial Services Agency (FSA) accused the exchange of breaching fund settlement laws. Despite these allegations, BitForex has largely evaded significant attention from regulators and the media.

The situation with BitForex draws parallels to the closure of another Hong Kong-based exchange, Atom Asset Exchange (AAX), in November 2022. AAX ceased operations shortly after FTX filed for bankruptcy, leading to the arrest of AAX’s former CEO and board member by Hong Kong police. Notably, the founder of AAX remains at large, allegedly with millions of dollars in users’ funds and access to exchange wallets.

BitForex website accessibility issues and CEO departure

BitForex users attempting to access the company’s website have encountered obstacles, with some reporting being blocked entirely. Despite these accessibility issues, certain pages of the exchange’s website, including an announcement regarding the departure of CEO Jason Luo, remain active.

As uncertainty shrouds BitForex and its future operations, stakeholders are left seeking clarity and accountability from the exchange’s management. With regulatory scrutiny mounting and users facing difficulties accessing their accounts, the cryptocurrency community awaits further developments regarding BitForex’s withdrawal suspension and ongoing controversies.

BitForex’s decision to suspend withdrawals, coupled with allegations of significant cryptocurrency outflows and regulatory concerns, has cast a shadow of uncertainty over the exchange’s operations. As users grapple with accessibility issues and unanswered questions, the cryptocurrency community watches closely for updates and potential resolutions to the ongoing saga surrounding BitForex.

Disclaimer: The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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