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Millions potentially stolen as Asian cryptocurrency exchange CEO disappears
Millions may have been stolen after the chief executive of a little-known Asian cryptocurrency exchange called IDAX disappeared with the keys to the company’s cold wallets.
The origins of the company are cloudy, but the company appears to be operated out of Shanghai. Cryptocurrency exchanges are illegal in China, but the company was registered in both Singapore and Mongolia.
What is known is that CEO Lei Guorong has disappeared, a fact confirmed by IDAX itself. In a statement on Friday, the company said that “IDAX Global CEO have gone missing with unknown cause and IDAX Global staffs were out of touch with IDAX Global CEO.” As a consequence, the company has suspended all deposits and withdrawals.
Suspending withdrawals, while a wise move, may be the result of the company not having access to client funds held in cold wallets, if reports Friday are correct that Guorong took the keys with him when he disappeared.
Exactly how much could have been stolen is pure speculation at this point. While little-known in the West, IDAX can’t be called a small exchange. By volume, the exchange was ranked 12th in the world with $757 million traded over a 24-hour period. At the very least, the amount stolen could be in the low millions of dollars but could be as high as hundreds of millions.
The company’s illegal operation in China and the disappearance of the CEO could be linked. On Nov. 24 IDAX announced that it would no longer provide services for users in China. Given that it was dubious that it was providing services within China to begin with, particularly while registered outside the country, it may have caught the attention of authorities.
Presuming that’s the case, the CEO may have disappeared to avoid being arrested, or he may have actually been arrested and that’s why he’s disappeared. What is clear is that no one, including the company itself, knows where he is.
The news of a potential exit scam at IDAX comes days after $52 million in Ethereum was reported to have been stolen from South Korean cryptocurrency exchange Upbit. The theft at Upbit is suspected to be an inside job.
Image: Idax
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