BitForex goes offline after mysterious $57 million withdrawal

BitForex, the Hong Kong-based cryptocurrency exchange, abruptly went offline following a mysterious withdrawal of $57 million from its hot wallets. Blockchain detective ZachXBT was among the first to spotlight this, revealing that BitForex has ceased withdrawal transactions and its team appears to be unresponsive.

Efforts to access BitForex’s official website now result in a message indicating that access is blocked. This incident follows last year’s warnings from regulators in Japan against the exchange for operating without proper registration, alongside others like Bitget, MEXC Global, and Bybit. In 2019, Chainalysis also reported suspicions of inflated trading volumes by BitForex.

The situation escalated when, a day before halting withdrawals, around $56 million worth of cryptocurrencies were withdrawn from the exchange’s wallets.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

Since May 2023, there has been no update from BitForex’s social media accounts. On its official Telegram channel, users have been reporting issues ranging from being unable to access their accounts to their dashboards not displaying any assets. Some users have shared screenshots indicating they have been blocked from the company’s website.

In September 2023, BitForex was among the top global crypto exchanges by capitalization, with a daily trading volume of approximately $2.6 billion. Currently, 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 had been little to no significant regulatory or media attention on BitForex since then.

This incident comes in the wake of another Hong Kong exchange, Atom Asset Exchange (AAX), moving 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, is allegedly still at large with substantial user funds and access to exchange wallets.