Hong Kong’s SFC Warns Public of Suspected Fraud by Crypto Exchange Bitforex

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Hong Kong Securities and Futures Commission (SFC), Bitforex, Virtual Asset Scams, Cryptocurrency Exchanges, Investor Protection, Suspicious Activity, Regulatory Compliance, User Complaints, Hot Wallet Leaks.

Hong Kong’s Securities and Futures Commission (SFC) has issued a warning to the public about cryptocurrency exchange Bitforex, citing a suspected virtual asset scam. The warning comes amid growing concern about the exchange’s operations and its ability to process user withdrawals.

According to the SFC statement, Bitforex is not licensed or registered to offer regulated activities in Hong Kong. The regulator has received numerous complaints from investors who have failed to withdraw their funds from the platform, raising suspicions of fraudulent activity.

The SFC’s warning follows recent findings by blockchain researcher ZachXBT, who reported that Bitforex’s hot wallets saw outflows of approximately $56.5 million on February 23. Shortly after the significant outflows, users started experiencing problems with withdrawals that remained unprocessed without official communications from exchanges.

The lack of communication from Bitforex has led to increased uncertainty among the user base, with many taking to social media platforms to demand answers and express concerns about the safety of their funds. The exchange’s CEO stepped down from his position just a month before the ongoing issues, further compounding the growing anxiety surrounding the platform.

Bitforex owns significant portions of the supply of TRB (Tellor) and OMI (ECOMI) tokens. The exchange’s wallets are closely monitored by the crypto community for any additional suspicious activity.

The SFC’s warning serves as a reminder of the risks associated with unregulated cryptocurrency exchanges and the importance of doing due diligence before investing in virtual assets. The regulator urges investors to exercise caution and only work with licensed or registered entities when engaging in cryptocurrency-related activities.

The SFC encourages anyone who has invested in Bitforex or has been affected by suspected fraudulent activities on the exchange to contact the regulator and provide relevant information to assist their investigation.

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The ongoing situation at Bitforex highlights the need for increased regulatory oversight of cryptocurrency exchanges. As more investors enter the market, it is critical for authorities to take proactive measures to protect consumers and prevent fraudulent activities.

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