Exit Scam or Something Else? Cryptocurrency Exchange CEO Goes Missing » BitcoinerX

Lei Guorong, the CEO of Chinese cryptocurrency exchange Idax, has reportedly gone missing after the exchange experienced a run on withdrawals.

One thing that many cryptocurrency enthusiasts fear is the exit scam. This is when a person associated with a crypto project runs off with all the money raised, leaving the actual users of said project holding an empty bag. There is now some worry about the Idax crypto exchange in China as its CEO, Lei Guorong, has gone missing and withdrawals have been suspended.

Where in the World is Idax CEO Lei Guorong?

The exchange broke the news concerning its missing CEO with an official blog post that was published yesterday. Idax had noted a few days before the CEO went missing that the exchange had experienced a run on withdrawals. The exchange said that the “channel that causes the withdrawal of the mainstream currency is in a congested state.” Idax then asked its users to wait patiently.

This bit of unwelcome news was then followed a few days later with CEO Lei Guorong going missing. The exchange posted:

Since we have announced the announcement on November 24 [withdrawal channel congestion], 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.

The platform says it is working on an emergency plan, including its deposit/withdrawal service, and asks its users to be patient.

So far, no information has come to light on where the CEO has gone, nor why he chose to disappear. Some are inferring that the CEO has run off with the cold wallet keys due to the announcement stating that cold wallet access has been curtailed. Others are saying that the exchange just locked down the wallet.

There are worries that the situation with Idax will turn out like QuadrigaCX. In the case of QuadrigaCX, the founder of the exchange died, which cut off access to 115,000 users as he was the only person with access to the passwords. A court-ordered monitor eventually found that he had removed much of the exchange’s crypto to other exchanges in order to fund his trading ventures, not to mention a comfortable lifestyle for him and his wife.

It's been a rough week for cryptocurrency exchanges.

Rough Week for Exchanges

This has been a brutal week for cryptocurrency exchanges. Upbit, a South Korean exchange, was hacked to the tune of roughly US$50 million at the beginning of the week.

As for Idax, it is one of five cryptocurrency exchanges in China that have shut down or cut off trading for Chinese citizens. The country’s communist government is stepping up its crackdown on cryptocurrency. Idax and Btuex will now only offer services to overseas users, while Biss is closed while it deals with a government probe. Two other exchanges, Bitsoda and Akdex, are terminating their service.

Images courtesy of Pixabay.

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