Hong Kong’s SFC Launches Probe into BitForex


Hong Kong’s Securities and Futures Commission (SFC)
has flagged BitForex, a cryptocurrency exchange, for suspected fraud. The
exchange abruptly went offline on February 23, with $57 million reportedly missing
from its hot wallets.

BitForex’s sudden disappearance prompted Hong Kong’s
regulator to add the company to its alert list regarding potential fraud
associated with the exchange. The SFC announced its concerns, citing the
exchange’s lack of licensing or registration for operating a Virtual Asset
Trading Platform (VATP) in Hong Kong.

The SFC mentioned: “Alert List is a list of
entities which have come to the attention of the SFC because they are
unlicensed in Hong Kong and are believed to be, or to have been, targeting Hong
Kong investors or claim to have an association with Hong Kong.”

Source: SFC

Recently, BitForex experienced significant
disruptions when it abruptly went offline following the mysterious withdrawal
of $57 million from its hot wallets, Finance Magnates reported. This situation,
which emerged amidst growing concerns surrounding the exchange’s operational
status, has drawn comparisons to past regulatory warnings issued against
similar platforms in Japan.

Efforts to access BitForex’s official website have
been futile, with users encountering messages stating “blocked access.” This development
followed previous warnings from Japanese regulators regarding BitForex’s lack
of proper registration and suspicions of inflated trading volumes reported by
Chainalysis in 2019.

BitForex’s Unregistered Operations

ZachXBT, a blockchain investigator, noted that three
of BitForex’s hot wallets experienced outflows totaling about $56.5 million
before the exchange halted transactions. Users reported various issues,
including blocked access to the company’s website and difficulties accessing
their accounts.

Despite ranking among the top global exchanges in
September 2023, BitForex’s current operational status remains uncertain, with
CoinMarketCap no longer providing live data on the platform.

Following reports from victims unable to access
their accounts and withdraw assets from BitForex due to the shutdown of its
website, 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 by
Coindesk.

Last year, the SFC partnered with the Hong Kong Police Force. This collaboration aims to streamline the exchange of
information about suspicious activities and breaches associated with VATPs.

One of the objectives of the working group
is to implement a mechanism for assessing the risks posed by suspicious VATPs.
This approach enables authorities to promptly identify and mitigate potential
issues, reducing the vulnerability of investors to fraudulent activities.

Hong Kong’s Securities and Futures Commission (SFC)
has flagged BitForex, a cryptocurrency exchange, for suspected fraud. The
exchange abruptly went offline on February 23, with $57 million reportedly missing
from its hot wallets.

BitForex’s sudden disappearance prompted Hong Kong’s
regulator to add the company to its alert list regarding potential fraud
associated with the exchange. The SFC announced its concerns, citing the
exchange’s lack of licensing or registration for operating a Virtual Asset
Trading Platform (VATP) in Hong Kong.

The SFC mentioned: “Alert List is a list of
entities which have come to the attention of the SFC because they are
unlicensed in Hong Kong and are believed to be, or to have been, targeting Hong
Kong investors or claim to have an association with Hong Kong.”

Source: SFC

Recently, BitForex experienced significant
disruptions when it abruptly went offline following the mysterious withdrawal
of $57 million from its hot wallets, Finance Magnates reported. This situation,
which emerged amidst growing concerns surrounding the exchange’s operational
status, has drawn comparisons to past regulatory warnings issued against
similar platforms in Japan.

Efforts to access BitForex’s official website have
been futile, with users encountering messages stating “blocked access.” This development
followed previous warnings from Japanese regulators regarding BitForex’s lack
of proper registration and suspicions of inflated trading volumes reported by
Chainalysis in 2019.

BitForex’s Unregistered Operations

ZachXBT, a blockchain investigator, noted that three
of BitForex’s hot wallets experienced outflows totaling about $56.5 million
before the exchange halted transactions. Users reported various issues,
including blocked access to the company’s website and difficulties accessing
their accounts.

Despite ranking among the top global exchanges in
September 2023, BitForex’s current operational status remains uncertain, with
CoinMarketCap no longer providing live data on the platform.

Following reports from victims unable to access
their accounts and withdraw assets from BitForex due to the shutdown of its
website, 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 by
Coindesk.

Last year, the SFC partnered with the Hong Kong Police Force. This collaboration aims to streamline the exchange of
information about suspicious activities and breaches associated with VATPs.

One of the objectives of the working group
is to implement a mechanism for assessing the risks posed by suspicious VATPs.
This approach enables authorities to promptly identify and mitigate potential
issues, reducing the vulnerability of investors to fraudulent activities.



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