Cryptocurrency exchange IDAX’s CEO flees with cold storage keys

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It appears that Shanghai-based cryptocurrency exchange IDAX’s users may have lost millions as its chief executive has reportedly run away with access to cold storage keys. 

Little is known about this bush-league Asian cryptocurrency exchange, except for the fact that it offered multi-cryptocurrency exchange services with its servers based out of China. On 29th November 2019, came forth a piece of distressing news that its chief executive, Lei Guorong, has disappeared with access to the platform’s cold wallets as none of IDAX Global staff were able to get in touch with him.


Cryptocurrency exchange IDAX controversy

As a result, the company immediately put a halt to all its deposits and withdrawals services, implying that it does not have access to the user funds stored in cold wallets anymore.

Exactly how much money is purloined is purely speculative at this moment, but to call this exchange a small-time cryptocurrency business would probably be a wrong thing to claim. With a daily trading volume of over seven hundred and fifty million US dollars ($757 million), this cryptocurrency exchange ranked twelfth most extensive in the world. Thus, the misappropriated amount could go as high as a hundred of millions of dollars.

Meanwhile, many experts link the CEO Guorong’s purported disappearance with company’s illegal business operations in China, considering the fact that it was registered outside the country and still continued to serve Chinese clients, until 24th November 2019, when it officially announced the suspension of its services to Chinese customers. Naturally, it grabbed the attention of the financial watchdogs, following which, some claim that the CEO’s disappearance story is only a cover-up of a much bigger debacle.   

Exit scams on the rise

What’s more, upsetting is the fact that the potential IDAX exit scam is far from being the only one. The chain of events displays an eerie resemblance to the debatable cryptocurrency exchange from Canada, Quadriga CX, that is responsible for the loss of approximately two hundred million US dollars ($200 million) as its CEO, Gerald Cotten, passed away under mysterious circumstances while in India. Apparently, he had the control keys to authorized access to user funds.

In another similar case, that is suspected to be the consequence of a dubious inside job, South Korean cryptocurrency exchange Upbit reported loss of fifty million US dollars ($52 million) worth of Ethereum from its platform, earlier this month.

Featured Image by Pixabay

Manasee Joshi

Manasee Joshi

An avid reader and an enthusiastic writer, Manasee recently chose to dedicate her time doing freelance writing. A degree in English literature and experiences in Administration, HR, finance, literature, creativity and innovation tucked under her belt, she crafts engaging and compelling content for crypto and blockchain audience.

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