Shutdown of China's FXBTC Exchange Leads to Customer Outrage

FXBTC users are reporting they were not informed of the exchange's plans to close on 10th May.

AccessTimeIconMay 14, 2014 at 5:52 p.m. UTC
Updated Sep 14, 2021 at 2:07 p.m. UTC

Some former customers of the now-defunct China-based digital currency exchange FXBTC are reporting that its operators are still holding customer funds, and that their attempts to retrieve their holdings have been unsuccessful.

Reports suggest these customers did not receive word that the exchange was shutting down, and as a result, did not withdraw funds before a deadline set by FXBTC.

The exchange announced it would close due to pressure from the country's central bank on 2nd May, informing customers at the time that they would have until 10th May to withdraw funds from the exchange.

Caixin's Li Xiaoxiao, who first broke the news that the People's Bank of China would seek to more tightly enforce bitcoin restrictions, however, is reporting that some site users have also reported difficulty obtaining funds prior to this deadline, writing:

"The website notice stated that the website would be open until [10th May]. However, as of 24:00 on [9th May], the FXBTC website was shut down, and some users had not yet withdrawn their money or coins in time, but the website's customer support was already unavailable."

Exchange users have reported the incident to Shanghai's Xujiahui District Public Safety Bureau, though reports suggest that this agency still needs to formally accept the case in order for former users to seek restitution.

Withdrawal issues

Withdrawal issues began prior to 10th May, when the rapid removal of funds from FXBTC accounts caused the price of BTC to decline rapidly on the platform.

By 8th May, reports say, the price of bitcoin on FXBTC was 500 RMB (0.18 BTC or roughly $80 at press time) below the price listed on other exchanges.

Customers who left money in the exchange say they have not received word from the company as to if and when they can retrieve their holdings.

The total amount of customer funds allegedly being held by the exchange is not yet known, though sources told CoinDesk the overall value of bitcoins and litecoins could be between $8,000 and $13,000.

Next steps

Notably, members of China's bitcoin community had previously raised concerns about the exchange's closure and subsequent plans for the distribution of customer funds, including BTC China and Bitcoin Foundation board member-elect Bobby Lee.

China-based media outlets are reporting that attempts by former exchange users and reporters to contact FXBTC have been unsuccessful.

One source told Xiaoxiao that he is optimistic any remaining funds will be returned, though, saying "this website has been pretty low-key, and probably wouldn't maliciously run away with funds".

Additional reporting contributed by Rui Ma.

Angry customer via Shutterstock


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