The Hong Kong-based cryptocurrency exchange BitForex has plunged into darkness, leaving its users in a state of panic. The suspension of its website and trading application on February 23 has rendered users unable to access their funds or the exchange itself. What is even more alarming is the fact that the exchange, which boasted a trading volume exceeding $2 billion just a day before, has now vanished without a trace.
Data from CoinGecko reveals a drastic decrease in trading volume from $2.5 billion to $1 billion between February 22 and February 24 before coming to a standstill. However, upon closer examination, normalized data suggests that BitForex may have inflated its volumes by up to 100 times by considering web traffic statistics in the calculation of trading volume. This raises serious concerns about the credibility and transparency of the exchange.
Crypto investigator ZachXBT brought to light the outflows of approximately $56.5 million from BitForex’s hot wallets on February 23. Subsequently, withdrawals were abruptly halted without any official communication from the exchange. Furthermore, an analysis of BitForex’s token holdings reveals that the exchange controls a significant portion of TRB and OMI tokens, raising further red flags about its operations.
The sudden departure of BitForex CEO Jason Luo a month ago adds a layer of mystery to the situation. In his statement on January 31, Luo mentioned stepping down from his position while expressing his commitment to the exchange. However, the timing of his resignation, coupled with the recent events, has fueled skepticism about the company’s stability and future prospects.
The on-chain activity of BitForex’s native BF token has been minimal, with only $2,000 worth of movements recorded in the past 11 days. CoinmarketCap’s data, last updated over 65 hours ago, indicates a decrease in trading volume for Ethereum and Bitcoin on the exchange. The exchange’s X account has remained inactive since February 21, leaving users in the dark about the platform’s future.
Despite having a ‘CCC’ security rating by Certified and reportedly holding an insurance policy, BitForex’s lack of communication across various platforms has left users anxious and uncertain. The company’s official Telegram channel, with over 23,000 members, has seen minimal activity from admins, with some accounts even being deleted. This ominous silence from BitForex has left users with funds trapped on the exchange in a state of distress and disbelief.
The sudden disappearance of BitForex, coupled with questionable trading volumes, suspicious activities, and a lack of transparency, paints a troubling picture for the exchange and its users. As the cryptocurrency market continues to evolve, incidents like these serve as a stark reminder of the risks and uncertainties associated with digital asset trading.