BitForex Plunges Offline: $57 Million Crypto Withdrawal

BitForex, a Hong Kong-based cryptocurrency exchange, has
recently faced significant disruptions as it abruptly went offline following
the mysterious withdrawal of $57 million from its hot wallets. The situation
was first brought to light by blockchain detective ZachXBT, who noted the
cessation of withdrawal transactions and the apparent unresponsiveness of
BitForex’s team.

Efforts to access BitForex’s official website have been met
with a message indicating blocked access, exacerbating concerns surrounding the
exchange’s operational status. This development follows warnings issued by
Japanese regulators last year against BitForex and other exchanges, including
Bitget, MEXC Global, and Bybit, for operating without proper registration.
Moreover, in 2019, Chainalysis reported suspicions of inflated trading volumes
by BitForex.

The situation escalated further when, a day before halting
withdrawals, approximately $56 million worth of cryptocurrencies were withdrawn
from BitForex’s wallets. ZachXBT detailed that three of BitForex’s hot wallets
experienced outflows totaling about $56.5 million in cryptocurrencies before
the exchange ceased processing transactions.

Since May 2023, there have been no updates from BitForex’s
social media accounts, and users have reported various issues, including being
unable to access their accounts and encountering blank dashboards. Some users
have also shared screenshots indicating they have been blocked from accessing
the company’s website.

Japan’s Financial Services Agency and BitForex’s
Unregistered Operations

In September 2023, BitForex ranked among the top global
crypto exchanges by capitalization, boasting a daily trading volume of
approximately $2.6 billion. However, CoinMarketCap no
longer provides live data on BitForex.

Earlier in April 2023, Japan’s Financial Services Agency
accused BitForex of violating the country’s fund settlement laws by operating
without proper registration. However, there has been little to no significant
regulatory or media attention on BitForex since then.

This incident occured amidst broader concerns within the
cryptocurrency industry, including the recent actions of another Hong Kong
exchange, Atom Asset Exchange (AAX), which moved around $55.6 million worth of
Ether from its wallets. AAX ceased all operations on November 13, 2022, shortly
after the high-profile bankruptcy of FTX. Following the shutdown, AAX’s CEO
Thor Chan and board member Haoming Liang were arrested by Hong Kong police. The
founder of AAX, who remains unidentified, allegedly remains at large with
substantial user funds and access to exchange wallets.

BitForex, a Hong Kong-based cryptocurrency exchange, has
recently faced significant disruptions as it abruptly went offline following
the mysterious withdrawal of $57 million from its hot wallets. The situation
was first brought to light by blockchain detective ZachXBT, who noted the
cessation of withdrawal transactions and the apparent unresponsiveness of
BitForex’s team.

Efforts to access BitForex’s official website have been met
with a message indicating blocked access, exacerbating concerns surrounding the
exchange’s operational status. This development follows warnings issued by
Japanese regulators last year against BitForex and other exchanges, including
Bitget, MEXC Global, and Bybit, for operating without proper registration.
Moreover, in 2019, Chainalysis reported suspicions of inflated trading volumes
by BitForex.

The situation escalated further when, a day before halting
withdrawals, approximately $56 million worth of cryptocurrencies were withdrawn
from BitForex’s wallets. ZachXBT detailed that three of BitForex’s hot wallets
experienced outflows totaling about $56.5 million in cryptocurrencies before
the exchange ceased processing transactions.

Since May 2023, there have been no updates from BitForex’s
social media accounts, and users have reported various issues, including being
unable to access their accounts and encountering blank dashboards. Some users
have also shared screenshots indicating they have been blocked from accessing
the company’s website.

Japan’s Financial Services Agency and BitForex’s
Unregistered Operations

In September 2023, BitForex ranked among the top global
crypto exchanges by capitalization, boasting a daily trading volume of
approximately $2.6 billion. However, CoinMarketCap no
longer provides live data on BitForex.

Earlier in April 2023, Japan’s Financial Services Agency
accused BitForex of violating the country’s fund settlement laws by operating
without proper registration. However, there has been little to no significant
regulatory or media attention on BitForex since then.

This incident occured amidst broader concerns within the
cryptocurrency industry, including the recent actions of another Hong Kong
exchange, Atom Asset Exchange (AAX), which moved around $55.6 million worth of
Ether from its wallets. AAX ceased all operations on November 13, 2022, shortly
after the high-profile bankruptcy of FTX. Following the shutdown, AAX’s CEO
Thor Chan and board member Haoming Liang were arrested by Hong Kong police. The
founder of AAX, who remains unidentified, allegedly remains at large with
substantial user funds and access to exchange wallets.

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