Little-Known Crypto Exchange With Ties to a Shanghai Firm Halts Services, Says CEO 'Missing'

IDAX says its unnamed "global CEO has gone missing" and asked customers to stop using its services.

AccessTimeIconNov 29, 2019 at 10:38 a.m. UTC
Updated Sep 13, 2021 at 11:45 a.m. UTC

An obscure cryptocurrency exchange named IDAX has said its "global CEO has gone missing" and asked customers to stop using its services.

The exchange said in an urgent notice on Friday that its chief – whose name was not provided – has been missing for unknown reasons for five days.

As a result, the exchange said the access to its cold wallets that store almost all the crypto assets on IDAX has been restricted and deposits and withdrawals are not allowed. "It is recommended that you refrain from using our all platform services," the exchange said.

The announcement comes just days after the exchange notified users on Nov. 24 about congestion holding up deposits and withdrawals and that it would no longer provide services to China-based users. It's not clear what quantity of assets are in the firm's custody.

It's also not known, publicly at least, what led to the unnamed CEO's disappearance. There are signs that IDAX has close ties to a Chinese firm based in Shanghai and has a presence in the city, which has been taken tougher measures in cracking down on crypto exchanges and token sales recently.

Shanghai link

IDAX's official website states that it was founded in 2017 in Mongolia by an entity called the Global Blockchain Research Center (GBC). The GBC's website also lists IDAX exchange as one of its businesses.

However, public information also shows that the exchange is connected to a company called Nianxiang Group that is based in Shanghai, China.

Currently, the website of Nianxiang Group is not accessible. But indexed Google data shows that the firm's website, before it went down, did say that Nianxiang's overseas business unit owns the Global Blockchain Research Center.

A profile page of Nianxiang on Chinese news portal Sohu also shows it's behind the Global Blockchain Research Center.

According to Chinese business registration data, Nianxiang Group is solely owned by an individual called Lei Guorong and is registered in Shanghai. Further, of all the 43 individuals that list IDAX as their employer on LinkedIn, 26 indicate Shanghai is current location.

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Indexed result by searching Nianxiang and GBC in Chinese

Token issuance

Notably, IDAX, with its presence in Shanghai, conducted a sale for its ERC-20-based exchange token, called IDAX Token (IT), in February this year, during which 200 million IT were issued.

In an announcement in February, the firm said the subscription price was at $0.2 per token, but did not clearly say what portion of the 200 million IT was sold.

IT was listed for trading after the issuance and has since then dropped by over 90 percent and was delisted on Nov 21.

In February, the firm released a white paper – only found in Chinese – and stated that 60 percent of the tokens will be used as "operation incentives," while the team will keep 10 percent to itself. A further 20 percent was to be reserved for the "IDAX ecosystem" and 10 percent to circulate on the exchange.

However, the white paper didn't disclose the name of the IDAX CEO and most of the team members listed in the white paper are only identified by their first name. CoinDesk hasn't yet been able to locate other corroborating information showing the identity of the team members.

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