Hong Kong-based cryptocurrency exchange BitForex has banned withdrawals for at least three days without explanation.
With no comment from the exchange, experts attribute this to a massive withdrawal of $56 million in cryptocurrency from the exchange.
Crypto expert ZachXBT wrote in X that on February 23, an outflow of $56.5 million in cryptocurrency was recorded from three different BitForex hot storage addresses, and a day later the exchange stopped processing all transactions.
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Users attempting to access the site saw a page that read, "Sorry, you have been blocked." The exchange then faced accusations of possible fraud but has not made any statements.
BitForex has remained strangely silent, offering no official explanation for the situation. Users attempting to access their accounts or the company's website receive a "You have been blocked" message, causing BitForex clients even more concern.
The BitForex website displays an error, but some pages are still open. For example, a January 31 announcement that BitForex CEO Jason Luo had left the company.
Bitforex holds a significant portion of certain cryptocurrencies: 18% of TRB supply and 7% of OMI supply.
The sudden halt of withdrawals and lack of communication with Bitforex have caused concern among users and the wider crypto community. The exchange's X account has not been updated since May 2023. On the official Telegram channel, BitForex users have reported problems with their accounts and access blockages.
Network security expert ZachXBT conducted a thorough investigation and drew conclusions regarding the connection with the outflow of funds from BitForex hot wallets. ZachXBT's investigation predicts possible consequences for the crypto community amid the current situation surrounding BitForex.
Last year, Japan's Financial Services Agency (FSA) found that BitForex was operating without a license, despite the fact that BitForex ranked among the world's top crypto exchanges by capitalization in September 2023. The daily trading volume of the cryptocurrency was about $2.6 billion. However, experts suspect that this data may have been falsified.
It is worth noting that BitForex did not attract significant regulatory attention at that time. Currently, CoinMarketCap does not provide any operational data on BitForex.
This situation underlines the risks associated with crypto services and the importance of transparent operation and communication of exchanges in order to maintain the trust of users. In various forums and social networks, users are actively discussing the possible consequences of the suspension of withdrawals and a significant outflow of funds.
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