A series of three announcements reveals how the situation at the IDAX cryptocurrency exchange has gotten progressively worse over the last week. Five days ago, there was an announcement that withdraws were ‘congested’, while simultaneously saying user withdraw requirements were being reviewed.
The next announcement was that IDAX would no longer be available in China. Fiat to crypto exchanges are illegal in China, and IDAX definitely offered fiat options, so it is surprising that IDAX risked operating in China, to begin with.
The last announcement, at least as of this writing, was that the IDAX Global CEO has gone missing for an unknown reason, and the staff cannot contact him. Apparently the CEO went missing right when IDAX announced that withdraws were not working right.
The kicker is that IDAX cold storage is now inaccessible since the CEO apparently was the one who held the key for it. This means IDAX users have no access to their money, and deposits/withdrawals are disabled.
It is unknown exactly how much money has been lost, but it may be a lot since IDAX did have millions of dollars of liquidity, making it one of the more significant crypto exchanges.
It has been revealed that not only was IDAX operating a fiat to crypto exchange in China illegally, but also it has close ties to a Chinese firm called Nianxiang Group, which is based in Shanghai. Specifically, Nianxiang Group founded the Global Blockchain Research Center, which is the organization that launched IDAX in 2017.
Further, out of the 43 people on LinkedIn who say IDAX is their employer, 26 are in Shanghai.
It gets even worse. IDAX conducted an initial coin offering (ICO) for the Idax Token (IT) in February of this year, despite ICOs being illegal in China.
IDAX appears to have broken Chinese law by offering fiat to crypto trading and conducting an ICO, and now the CEO of IDAX has gone missing and all of the coins held by users are inaccessible. It is unknown at this time if the CEO has been taken into custody by the authorities or has run away.