IDAX stopped processing cryptocurrency deposits and withdrawals last November 22nd. Some days later, they announced the disappearance of its CEO, interrupting the exchange of assets.

During the ten years of existence of the cryptocurrency community, various projects and companies, including exchange houses, have been formed. Not everything has been positive for this sector since there have proliferated cases of internal fraud and thefts. IDAX Exchange, originally from China, has been recently added into the list of platforms whose CEOs have disappeared with no explanations.

It should be noted that the platform IDAX Exchange, also known as International Digital Asset Exchange, was founded in China. According to its webpage, its first site was opened in Mongolia, but it also owned offices in Singapore and South Korea. The firm not only provided Bitcoin, Ether and USDT trading services but also offered futures contracts and OTC market. In line with these services, the company launched in early February its token IT, which was even listed in official markets.

However, users of the platform denounced last November 22nd that they were not able to withdraw their funds. The board of IDAX blamed the unusual situation on congestion in the withdrawal channel due to increased demand. A few days later, the team reported that its CEO, Lei Guorong, had disappeared, but they did not know the reasons.

Due to the escape of its founder, the company restricted the access to the hardware wallet, where all the funds of the exchange house were deposited. The users were unable to use the platform, without the possibility to make deposits of withdrawals until further notice. The staff of IDAX promised to make an emergency plan to solve the situation, but they still have not replied.

Possibility of Fraud

The team of workers, comprised of more than 40 people, disappeared together with the CEO, after that report. The company has not given any more press releases or tweets regarding the future of the exchange house, disappearing from the social networks.

Not only the staff of IDAX disappeared abruptly but also the companies affiliated with this business. The exchange house was administered by an organization called Global Blockchain Center (GBC) of Research, according to its website. Investigating more deeply, it can be confirmed that these two services were managed by a single group originally from the city of Shanghai, known as Nianxiang. The access to the webpage of this company is currently disabled, thus increasing the irregularities around the IDAX case.

Everything seems to indicate that it will be difficult, and even impossible, for the affected users to access again their funds. This situation leads to asking whether these situations can be prevented and whether there was an alert signal that went unnoticed. Undoubtedly, there already existed irregularities at the exchange house that would eventually cause problems.

First of all, the board and the staff of IDAX were a group of strangers, differently from legal exchange projects, where all the members introduce themselves with their first and last names. Similarly, Bitwise denounced in mid-2019 that the IDAX market was built to register a daily volume larger than the one generated. Even worse, it was also a non-regulated service, which led to greater exposure to the theft of funds and fraud. The relative youth of the platform should have also been considered by the users before trusting their money to it since the years of experience on the market are good indicators of honesty and a good reputation.

By Alexander Salazar


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