It was on Feb 23 when users of the Hong Kong-based crypto exchange BitForex were hit with confusion and frustration as the website and trading application were suddenly suspended. This abrupt halt left users unable to initiate withdrawals or access the exchange, which had boasted a massive $2 billion in trading volume just a day prior. The lack of communication from BitForex only added to the mystery surrounding the sudden suspension, leaving users in the dark about the status of their funds.
Upon closer analysis of the trading volumes reported by BitForex, it became evident that the exchange may have inflated its volumes by up to 100 times. Normalized data, which takes into account web traffic statistics, showed a significant difference in trading volume compared to the reported figures. Additionally, on Feb 23, crypto investigator ZachXBT reported outflows of approximately $56.5 million from BitForex’s hot wallets, sparking concerns about the liquidity of the exchange.
Further scrutiny of BitForex’s holdings revealed that the exchange had a significant portion of TRB and OMI token supplies, specifically 18% of TRB and 7% of OMI. This raised red flags among users who were already seeking answers amidst the lack of communication from the exchange. The timing of the CEO’s decision to step down a month prior only added to the suspicions surrounding BitForex, as users questioned the motives behind the sudden leadership change.
Lack of On-Chain Activity and Communication
Despite the limited on-chain activity for BitForex’s native BF token, the exchange’s website and social media channels remained inactive. The lack of updates to trading data on platforms like CoinmarketCap further contributed to the uncertainty surrounding BitForex’s status. The absence of communication from the exchange’s official Telegram channel, particularly the deletion of accounts by admins, left users with funds stuck on the exchange feeling anxious and abandoned.
The dark reality facing BitForex users is a culmination of unexplained suspensions, inflated trading volumes, questionable holdings, and a lack of communication from the exchange. The uncertainty surrounding the future of BitForex has left users in a state of limbo, unsure of whether they will be able to recover their funds or receive any updates from the exchange. As the cryptocurrency market continues to evolve, incidents like these serve as a stark reminder of the risks associated with trading on unregulated exchanges.
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