We have seen a lot of rug pull attempts in the crypto market over the years. And Many of them were done at the coin level. Like making a coin, pumping it to some 2 digit number or even three and then taking the funds out. Eventually making the coin collapsing into the negative.
Same type of the scams can be done in the exchange level too. Some of the top exchanges like mt gox and others have done that using the excuse of the hacking and the database leak etc. Now recently BitForex has been caught moving the funds. And there seems to be a warning from the HongKong's SFC on this point.
Let's talk about BitForex cryptocurrency fraud and how HongKong is handling it.
Sometimes the legit ones go into the rug pull and they make sure that they don't leave the footprint. In case of the BitForex there was no activity from the network since May 2023. And they were having issues with the accessing of the social media updates for the company. And as the company decided to slowly move the funds.
In short span, they moved around 57 million out of the network. And there were some of the investigative company that have managed to find this one out. And they posted about this on twitter. You can find the reference for the same here. The twitter user ZachXBT regularly unmasks many scams and the security issues in the crypto and other internet finance world.
HongKong has the Securities and Futures Commission department that does the regulation on all things finance and the forex. So they were already issuing the warning on variety of the virtual companies doing the forex and the crypto trading. And they made this warning on specific companies in the past and made them either comply or close. And BitForex happened to miss in the past but now they were caught.
SFC has managed to issue the warning or you can say flag on this issue and making sure that the company like this gets shut down and the funds are not stolen from the new accounts. Now that warning is issued most likely there would be world wide exposure for the company and the partners who happened to be in it and things would go south for them now. You can find the SFC reference of the warning here.
There are countless crypto trading companies with the offices opened into the belize, cyprus and many other tax heaven nations where the main nations of other continents don't interfere. Except FBI that happenes to raid these places easily on regular basis. So now the forex trading companies opened into places like this are operating and playing with funds of people.
HongKong's runaways are most likely to be moved into such places. Just like how many US based companies owners run away to the cyprus. Most of such forex traders who are now into the crypto trading exchange platforms tend to run away once the regulation and the laws are added into the market. So BitForex being the con-exchange they had to run away too eventually. We saw that coming.
HongKong's SFC is now getting serious with the crypto regulation and the enforcement of the variety of the laws that need the staff of governance which govts often use. Let's see what happens to people behind BitForex in near future.
