Mar 05, 2024 12:30
Hong Kong's Securities and Futures Commission (SFC)has flagged BitForex, a cryptocurrency exchange, for suspected fraud. Theexchange abruptly went offline on February 23, with $57 million reportedly missingfrom its hot wallets.
BitForex's sudden disappearance prompted Hong Kong'sregulator to add the company to its alert list regarding potential fraudassociated with the exchange. The SFC announced its concerns, citing theexchange's lack of licensing or registration for operating a Virtual AssetTrading Platform (VATP) in Hong Kong.
Suspected Fraud and Regulatory Response
The SFC mentioned: "Alert List is a list ofentities which have come to the attention of the SFC because they areunlicensed in Hong Kong and are believed to be, or to have been, targeting HongKong investors or claim to have an association with Hong Kong."
Recently, BitForex experienced significantdisruptions when it abruptly went offline following the mysterious withdrawalof $57 million from its hot wallets, Finance Magnates reported. This situation,which emerged amidst growing concerns surrounding the exchange's operationalstatus, has drawn comparisons to past regulatory warnings issued againstsimilar platforms in Japan.
Efforts to access BitForex's official website havebeen futile, with users encountering messages stating "blocked access." This developmentfollowed previous warnings from Japanese regulators regarding BitForex's lackof proper registration and suspicions of inflated trading volumes reported byChainalysis in 2019.
BitForex's Unregistered Operations
ZachXBT, a blockchain investigator, noted that threeof BitForex's hot wallets experienced outflows totaling about $56.5 millionbefore the exchange halted transactions. Users reported various issues,including blocked access to the company's website and difficulties accessingtheir accounts.
Despite ranking among the top global exchanges inSeptember 2023, BitForex's current operational status remains uncertain, withCoinMarketCap no longer providing live data on the platform.
Following reports from victims unable to accesstheir accounts and withdraw assets from BitForex due to the shutdown of itswebsite, the SFC requested the Hong Kong Police Force to block access to the exchange's relevant website links and social media pages, according to a report byCoindesk.
Last year, the SFC partnered with the Hong Kong Police Force. This collaboration aims to streamline the exchange ofinformation about suspicious activities and breaches associated with VATPs.
One of the objectives of the working groupis to implement a mechanism for assessing the risks posed by suspicious VATPs.This approach enables authorities to promptly identify and mitigate potentialissues, reducing the vulnerability of investors to fraudulent activities.
This article was written by Jared Kirui at www.financemagnates.com.
World Crypto Global
