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The Mongolia-based crypto exchange IDAX has updated its users about an odd situation regarding its missing CEO and has announced it restricts access to its cold wallet.
The cryptocurrency exchange IDAX released an “urgent notice” on Friday, November 29th. The notice states that the company’s CEO has been missing since November 24th; because of this, the users of the exchange’s cold wallet would face limited to no access to their digital wallets which store all cryptocurrencies. Deposits and withdrawals are currently restricted until further notice.
The announcement talks about coming up with emergency plans to deal with the situation. It states:
“IDAX Global is drawing up an emergency plan about platform services including deposit/withdrawal service so it is recommended that you refrain from using our all platform services.”
Interestingly, the CEO of the crypto exchange remains unnamed, along with any additional details about his disappearance in the notice. The company’s amount and type of digital assets are also not released to the public so any information about its cryptocurrency holdings remains unknown.
A little over a week ago, on November 24th, the company announced that it was suspending its services for users in China, presumable due to renewed Chinese crackdown efforts of local crypto exchanges. It also announced how a “dramatic” increase in IDAX withdrawals had led the “channel that causes the withdrawal of the mainstream currency” to a congested state.
IDAX’s Connection to China
On its website’s “about us” page, IDAX states that the exchange was founded in 2017 in Mongolia by a company called GBC (Global Blockchain Research Center). GBC’s about page also confirms this by stating that “IDAX blockchain digital asset trading platform” is one of its enterprises. Yet, this apparently is not the full story. The crypto exchange has also been publicly known that GBC (and consequently, IDAX too) also has ties with a company known as “Nianxiang Group” which is based in Shanghai, China.
The cryptocurrency exchange’s links to a Chinese company can explain the suspension of its services for China-based users. Cryptocurrency usage in China is presently under a lot of scrutiny and there is a huge crackdown on any type of business entities that are associated with it.
The owner of Nianxiang Group is Lei Guorong, who is also based in Shanghai. Furthermore, of all the 41 people who are employed by IDAX and listed on its LinkedIn page, 27 state China as their location and only 3 list Mongolia as their current residence.
IDAX released its ERC-20-compliant token known as IT. Initially, 200 million IDAX Tokens (IT) were released in February with a price of $0.2/token. However, the exact number of tokens that were actually acquired were not made public.
During all this time, the crypto exchange was still based in Shanghai. The token’s price lost almost its entire value and by the end of November IDAX announced that it was taking the token out of the crypto market.
This bizarre case of IDAX is kind of similar to the case of the Canadian crypto exchange QuadrigaCX whose own CEO died (and rumored to have faked his own death), which ultimately resulted in the cessation of the entire operation of the exchange.