BitForex
A screenshot of the error message on BitForex's landing page. Bitforex

KEY POINTS

  • ZachXBT said withdrawals stopped processing "shortly" after $56.6 million in outflows on Feb. 23
  • Users have since taken to X to raise their concerns about the BitForex site's server being down
  • Japan's financial regulator flagged BitForex as operating without a license in the country in 2023
  • Chainalysis said in a 2019 report that BitForex may have faked its trading volume numbers

Cryptocurrency exchange BitForex has gone dark after over $56 million was reportedly taken out of the exchange's hot wallets last week.

The BitForex website displays the following message as of 8:00 p.m. EST: "Sorry, you have been blocked. You are unable to access bitforex.com." The exchange's last post on X (formerly Twitter) was on Feb. 21.

As early as Feb. 23, some users have been asking about the BitForex server supposedly being down.

One user said the BitForex website "has been down for days, and there is no information from the team." Another user said the exchange should at least inform its customers as the team was acting "very unprofessional and suspicious."

Prominent blockchain researcher ZachXBT first reported about "some suspicious activity" revolving around the exchange on X early Monday. "On Feb 23 their hot wallets saw outflows of ~$56.5M. Shortly after this time withdrawals stopped processing with no official announcements having been made since," he said.

The reports come less than a month after former CEO Jason Luo announced he was stepping down from his post. "A new leadership team is poised to take the reins, and I believe they will guide BitForex towards even greater horizons. I will continue contributing my wisdom and strength to BitForex because this is my eternal commitment to this home," he wrote in a blog post.

Earlier last year, BitForex, which owns 18% of the total supply of Tellor utility token TRB, was flagged by Japan's Financial Services Agency (FSA) for operating in the country without the appropriate licenses. Bybit, Bitget and MEXC Global were also flagged by the Japanese financial regulator at the time. It said BitForex and the other three flagged exchanges were violating Japanese fund settlement laws, as per a Coindesk translation.

Also, blockchain analysis firm Chainalysis flagged BitForex's "suspicious numbers" in a 2019 report, indicating that the exchange may have inflated its trading volume numbers. "BitForex's reported trade volume has grown quickly since its launch in 2018, but the exchange's extremely high trade volume to on-chain volume ratio dwarfs the baseline we established with the Bitwise 10, suggesting a substantial amount of its trade volume has been faked," the report pointed out.

Meanwhile, CEO and co-founder of decentralized Constellation (DAG) network Benjamin Jorgensen wrote on X that the Constellation team "noticed silence" from BitForex over the weekend. They repeatedly tried to reach out to support channels and Luo to determine what happened and said Constellation was discussing options for its community and holders, "including fast tracking other exchanges with stronger reputations."

Jorgesen provided an update hours later, saying Constellation has not yet heard from BitForex but has since coordinated with the community governance organization Stardustcollect "to freeze the primary liquidity wallets for $DAG and $DOR on Bitforex." The exchange launched $DAG last year.

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