- Hong Kong’s Securities and Futures Commission (SFC) has issued a public warning about suspected fraud involving cryptocurrency exchange BitForex
- The SFC added BitForex to its ‘Alert List’, which includes unlicensed entities targeting Hong Kong investors.
- BitForex went offline last week after around $57 million in user funds were withdrawn in the days preceding its unexpected closure.
Hong Kong’s securities and futures markets regulator has issued a public warning about cryptocurrency exchange BitForex for suspected fraud. The Securities and Futures Commission (SFC) added the exchange to its ‘Alert List’, a list of unlicensed entities that “are believed to be, or to have been, targeting Hong Kong investors or claim to have an association with Hong Kong.” Bitforex went offline last week with around $57 million in user funds withdrawn in the days leading up to its unexpected closure.
Withdrawals Suspended and Money Moved
Concerns arose regarding Bitforex’s status in late February as withdrawals were abruptly suspended, prompting a flood of complaints on the exchange’s Telegram channel. Users experienced inaccessible accounts and reduced balances, alleging that the exchange selectively removed messages addressing these issues. Bitforex attributed the shutdown to “unscheduled maintenance,” a statement that did little to quell user unrest, and nothing has been heard since.
Crypto sleuth ZachXBT also discovered that almost $57 million worth of tokens was withdrawn from the exchange’s hot wallets prior to its closure, raising the prospect of a hack or an inside job.
Complaints and concerns over Bitforex have now made it as far as the SFC, which has added Bitforex to its Alert List:
The SFC says that Bitforex is “suspected of engaging in fraudulent activities” and warns that customers are being prevented from accessing their balances.
With no news coming out of the exchange since its abrupt closure last week, it seems that customers may have to face up to the reality that their funds are gone, with civil and potentially criminal action to follow.
