In a shocking turn of events, Hong Kong-based crypto exchange BitForex has seemingly disappeared without a trace. On Feb 23, users were met with the suspension of the exchange’s website and trading application, leaving them unable to initiate withdrawals or access their accounts. This sudden blackout comes as a surprise to many, especially considering BitForex’s significant trading volume of over $2 billion, as reported just a day before the mysterious disappearance.
Data from CoinGecko reveals a startling decrease in trading volume from $2.5 billion to $1 billion between Feb 22 and Feb 24, before plateauing. However, upon closer inspection of normalized data, it appears that BitForex may have inflated its volumes by up to 100 times. Normalized data takes into account web traffic statistics when evaluating trading volume, revealing that the reported trading volume on Feb 22 was merely $25 million.
Crypto investigator ZachXBT shed light on the situation by reporting outflows of approximately $56.5 million from BitForex’s hot wallets on Feb 23. Withdrawals abruptly ceased without any official communication from the exchange, leaving users in a state of confusion and panic. Furthermore, an analysis of BitForex’s holdings raises red flags, with the exchange holding a significant portion of TRB and OMI token supplies, specifically 18% of TRB and 7% of OMI.
Adding to the mystery is the sudden departure of BitForex’s CEO, Jason Luo, a month prior to the exchange’s disappearance. In his departure statement on Jan 31, Luo mentioned handing over the reins to a new leadership team, leaving many to question the timing of his exit. The lack of transparency surrounding the leadership change, coupled with the recent events, has raised serious concerns about BitForex’s stability.
On-chain activity for BitForex’s native BF token has been minimal, with only $2,000 worth of transactions occurring in the past 11 days. Updates to CoinmarketCap’s data for the exchange have stagnated, showing dwindling trading volumes in Ethereum and Bitcoin. The exchange’s official Telegram channel remains inactive, with admins either deleting their accounts or failing to respond to user inquiries, leaving over 23,000 members in a state of uncertainty.
The alarming lack of communication across multiple platforms, including the website, X account, and Telegram channel, paints a bleak picture for BitForex users. With funds potentially trapped on the exchange and no signs of resolution in sight, those affected have ample reason to be concerned about the future of their investments. As the cryptocurrency community waits for answers, the disappearance of BitForex raises crucial questions about transparency, accountability, and the risks associated with trading on unregulated exchanges.