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BitForex Faces Issues with Withdrawals and Transparency
Hong Kong-based cryptocurrency exchange BitForex has been experiencing a complete blackout following the suspension of its website and trading application on February 23.
Before the halt, the exchange had a trading volume of over $2 billion as of February 24. However, approximately $56 million in cryptocurrencies was withdrawn from its wallets, leading to a suspension of withdrawals and user access to the platform.
The halt in withdrawals followed suspicious activity, including outflows of around $56.5 million from BitForex’s hot wallets. Despite this, the exchange has not made any official announcements about the situation, leaving users in the dark.
Questions Surrounding the Situation
It remains unclear whether the outflows from BitForex’s hot wallets were a result of a hacker attack or if the exchange voluntarily halted withdrawals. The lack of official statements from BitForex has raised concerns and uncertainties among users.
Uncertain Holdings and Inactive Communication Channels
Further scrutiny of BitForex’s holdings reveals concerning details, including a significant portion of TRB and OMI token supplies. However, the exchange’s official Telegram channel remains inactive, with users reporting issues such as difficulties logging in and encountering empty dashboards.
Decreasing Trading Volumes and Lack of Transparency
In addition to the withdrawal issues, BitForex has faced decreasing trading volumes, with suspicions arising due to the abrupt departure of CEO Jason Luo and limited transparency from the exchange. CoinGecko data indicates a significant decrease in trading volume from $2.5 billion to $1 billion between February 22 and February 24.
On-chain activity for the exchange’s native BF token has been limited, leading to doubts about the company’s stability and reliability. Users and observers are increasingly concerned about the safety of their funds and the future of the exchange amidst these uncertainties.
Regulatory Warnings and Compliance
The Securities and Futures Commission (SFC) of Hong Kong has issued a warning to crypto investors, emphasizing the importance of using only licensed trading platforms and verifying the regulatory status of the exchanges they are trading on. This warning coincides with the deadline for virtual asset trading platforms in Hong Kong to submit their license applications by February 29.
Currently, only OSL Digital Securities and Hash Blockchain are licensed virtual asset trading platforms in Hong Kong, with several other entities, including well-known names like OKX, HKVAX, Bybit, and DFX Labs, in the process of applying for licenses.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
