BitForex to Open for Withdrawals Following Chinese Police Investigation

Cryptocurrency exchange BitForex announces the reopening of withdrawals following a five-month outage caused by an investigation by the Jiangsu Province police in China.

Points

• BitForex to reopen withdrawals after five-month suspension.
• Trading and deposits remain suspended.
• Outage caused by a $57 million outflow and police investigation.
• BitForex will cease operations after returning assets to users.

Cryptocurrency exchange BitForex is set to reopen withdrawals after a five-month suspension triggered by an investigation by the Jiangsu Province police in China. The exchange announced in a post on X that while trading and deposits will remain suspended, clients who complete know-your-customer （KYC） verification will be able to withdraw their assets.

BitForex went offline on February 23, following a significant outflow of $57 million. User withdrawals and access to the site were blocked, prompting a warning from Hong Kong’s Securities and Futures Commission （SFC）. According to the exchange, the BitForex team was detained and investigated by the Jiangsu Province police on the same day, leading to the platform becoming inaccessible.

In the post, BitForex stated, “This unexpected event caused the platform to become inaccessible, and users were unable to withdraw assets on that day.” The exchange has now committed to returning assets to users and subsequently ceasing all operations. BitForex will undergo a comprehensive rectification process as part of its shutdown.

解説

• Police Investigation Impact: The investigation by the Jiangsu Province police highlights the regulatory challenges and risks faced by cryptocurrency exchanges operating in regions with strict regulatory environments. The significant outflow and subsequent investigation underscore the importance of robust security measures and compliance protocols.
• KYC Verification: The requirement for KYC verification before withdrawals can be processed reflects the growing emphasis on regulatory compliance in the cryptocurrency industry. KYC procedures help prevent fraudulent activities and ensure that exchanges adhere to legal standards.
• Regulatory Warnings: The warning from Hong Kong’s SFC illustrates the potential repercussions of non-compliance with regulatory requirements. Exchanges must maintain transparent and secure operations to avoid such warnings and potential legal actions.
• Operational Cessation: BitForex’s decision to cease operations after returning assets to users indicates the severe impact of regulatory actions on business continuity. It also highlights the importance of contingency planning and the ability to respond effectively to regulatory challenges.