The crypto community is abuzz with concerns over BitForex, a Hong Kong-based crypto exchange founded by Chinese entrepreneurs Jason Lou and Luca Lu in 2017. After it abruptly ceased operations and blocked user access, raising alarms over a potential exit scam. This comes following the mysterious withdrawal of approximately $57 million from the exchange’s hot wallets.
Before halting its services, BitForex (website) was observed transferring around $56.5 million in digital assets on February 23, according to investigations by the pseudonymous on-chain analyst ZachXBT. This move has led to a complete halt in trading activities on the platform, with CoinMarketCap and CoinGecko reporting zero trading volume for BitForex.
The unexpected shutdown has triggered widespread panic among BitForex users, who have taken to the exchange’s official Telegram channel to voice their frustrations over inaccessible accounts and vanished funds. There are reports that the exchange has been actively deleting messages from users raising these issues, while its Community Manager has become unresponsive and altered her profile in the wake of these events.
In an attempt to address the situation, BitForex issued a vague statement about undergoing “unscheduled maintenance,” communicated through the OMI ecosystem’s official Twitter account. This maintenance notice has done little to ease the concerns of its users. Notably, BitForex is a significant holder of the OMI token, accounting for nearly 7% of its total supply. OMI, the utility token for the Veve ecosystem, has seen its value plummet by 88% following the exchange’s troubles.
Access to the BitForex website is now severely restricted, with only a few support pages available, including an announcement about the departure of CEO Jason Luo at the end of January.
This incident is not BitForex‘s first brush with controversy. The exchange has previously been flagged by Japan’s Financial Services Agency (FSA) for operating without the necessary registration and has faced accusations of inflating its trading volumes.
In the wake of the shutdown, a Telegram group titled “Scammed by BitForex” has formed, attracting over 150 members who are sharing their experiences and exploring avenues for collective action. Some affected users have already lodged complaints with Hong Kong’s Securities and Futures Commission (SFC) and are urging others to do the same while seeking to raise awareness through crypto influencers and educational platforms.
