Hong Kong police probe crypto exchange that vanished with $57m in deposits

In the latest crypto scandal to rock Hong Kong, the city’s Commercial Crime Bureau is “looking into” BitForex, an exchange that went dark with $57 million in customer deposits last month, police officials told DL News.

While BitForex has registered offices in Hong Kong, there is no sign the venture ever occupied any of the addresses it provided. Two are virtual address services.

Citing its policy of not commenting on pending investigations, a police spokesperson declined to comment on details of the case.

‘They never came back. Four hours later they locked their doors and completely disappeared.’

—  Carl, BitForex investor

Meanwhile, investors have been shaken by the realisation they’ve taken heavy losses with little chance of recovery.

“People saw their deposits and funds being stolen in real time,” Carl, a crypto investor and research analyst in Australia, told DL News.

“All while the team kept repeating, ‘Don’t worry, It’s just maintenance, BitForex will be back again soon.’ But they never came back. Four hours later they locked their doors and completely disappeared.”

Elusive CEO

The search is on for BitForex CEO Jason Luo.

Even though BitForex was ostensibly based in Hong Kong, business registration documents give an address for him in Shenzhen, a city in mainland China where trading in virtual assets is illegal.

BitForex could not be reached for comment. The exchange became inaccessible on February 23.

On March 4, the Hong Kong Securities and Futures Commission, or SFC, warned investors not to use the platform.

BitForex has not been licensed by the SFC or applied to the SFC for a licence to operate a virtual assets trading platform in Hong Kong.

Those who lost money are desperate for answers.

‘This can’t be happening’

Carl, who declined to provide his surname to protect his privacy, said he used BitForex last October because it was one of the only exchanges where he could buy OMI, an altcoin.

He said he normally uses Binance for trading. Carl had about 10 million OMI tokens on BitForex that are currently worth around $20,000. He said another user he spoke with lost around $185,000 in Solana.

At first, Carl thought there was a bug in the app so he re-downloaded it. Then he couldn’t log in.

The support team said there was “unscheduled maintenance.” Someone else told him that their stake-to-earn program wasn’t working.

“That’s when it hit me. I’ve seen this before,” he said. “I knew it was over, and just remember thinking ‘this can’t be happening’.”

“A lot of people were pleading to the team, telling them not to steal their funds, that it was everything they had,” he said.

It’s not clear how many people have been affected by the exchange’s vanishing act. BitForex claimed it served more than six million users.

Carl is part of a channel on Telegram where people in the same situation are trying to work out what happened and contacting law enforcement around the world. It has almost 800 members.

Where is the CEO?

The top question investors have is where is Jason Luo, BitForex’s CEO?

After co-founding the exchange in 2017, Luo suddenly stepped down as CEO a few weeks before BitForex disappeared, he said on his LInkedIn profile. He didn’t give any information about who was going to take over.

Users are struggling to believe it is a coincidence.

Luo’s Telegram says “last seen recently,” but messages sent by DL News remain with a single check mark, indicating they have not been read.

Got a crypto story in Asia? Get in touch at callan@dlnews.com.