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Crypto Exchange Admits ‘Missing’ CEO Has User Funds Access Amid Exit Scam Fears

  • IDAX’s many problems continue to stroke suspicion.
  • The exchange finally admits “the truth”.
  • Is this all a cover-up for an exit scam?

In a story reminiscent of the QuadrigaCX scandal, crypto exchange platform, IDAX Global, has no idea where its CEO is, plus, he holds the exchange’s private keys…

Oh boy, it’s been a pretty lousy week for crypto exchanges; first Upbit reveals a $50 million hack, and now it turns out that IDAX might be in trouble as well.

IDAX: The Story So Far

These past few weeks haven’t been kind to IDAX. An ongoing crusade against the exchange has been forming. Angry users citing worsening withdrawal issues have continued to demand a response.  On November 24, they finally got one. IDAX blamed the problems on increased withdrawal requests, stating:

The channel that causes the withdrawal of the mainstream currency is in a congested state.

Then, on the very same day, the firm shut down opperations in China.

As if things couldn’t get any worse, the IDAX Token (IT) went kaput, literally falling to zero.

crypto IDAX exit scam
User quips about a potential IDAX exit scam | Source: Twitter

Understandably speculation of an exit scam was starting to engulf the exchange. Rumors circulated of the CEO, Lei Guorong, allegedly doing a runner. Citing sources close to the CEO, Chinese crypto media highlighted that user funds might have been appropriated by Guorong:

Assets may be lost and the CEO hid. Among the employees nobody knows about his whereabouts except the boss’s confidant connecting through external channels.

The Truth or a Cover-Up?

Now thanks to the pressure placed by its scorned investors, IDAX has finally admitted the alleged truth. The CEO is gone and with access to the exchange’s cold wallets.

IDAX conveyed news of Guorong’s disappearance via an “urgent announcement”: 

IDAX Global CEO have gone missing with unknown cause and IDAX Global staffs were out of touch with IDAX Global CEO. For this reason, access to Cold wallet which is stored almost all cryptocurrency balances on IDAX has been restricted so in effect, deposit/withdrawal service cannot be provided.

This statement will likely not allay many fears, especially given the shady way in which the exchange has conducted itself over the past few months. For now, at least, it’s a case of he-said-she-said.

This comes after yet another crypto exchange scandal as Upbit users are still reeling from the exchange’s recent $50 hack. On November 27, Upbit announced the loss of 342,000 ETH following the exploitation of Upbit’s hot wallets.

This article was edited by Samburaj Das.