Crypto Exchange BKEX Freezes Withdrawals Under Money Laundering Investigation

BKEX withdrawals were suspended after funds on its platform were used to launder money, according to the statement released on May 29th. It is reported that BKEX is working with authorities to investigate claims of money laundering activities involving funds belonging to its users.

BKEX said on May 29th that it would work with the appropriate authorities to resolve the underlying issues and restore regular trading. Thus, withdrawals will be suspended during the regulatory investigation whilst the platform cooperates with the police to collect evidence. Additionally, the company stated:

“BKEX team will fully cooperate with the regulatory investigation and do its best to restore the normal operation of the exchange. The team will actively work with the relevant authorities to resolve the current issues to ensure our users’ rights are protected to the greatest extent possible.”

Users are encouraged to contact customer service if they experience any other problems during the investigation, and the exchange pledged to maintain a transparent and timely communication process during that time. Some users have criticised BKEX for blocking withdrawals for all users because of a few users’ actions, saying they are confused as to why they are doing so. Many users wondered if the platform was financially healthy after rival centralised exchanges struggled in the past few months. According to a BKEX angel, users must remain patient, and the platform will resume its services soon. 

A significant concern in the crypto industry has been the possibility of money laundering through centralised crypto exchanges. KYC regulations were implemented to address this concern to prevent identity fraud, financial crimes, and money laundering.

The collapse of FTX last year has increased scrutiny for centralised exchanges. Due to deteriorating operational conditions, Hotbit shut down its services on May 22nd. Between 2019 and 2021, Chainalysis estimates Bitzalato received over $2 billion worth of cryptocurrency, including more than $966 million of illegal and potentially risky cryptocurrency. In October, the US Department of Treasury’s Office of Foreign Asset Control (OFAC) fined Bittrex $53 million for violating anti-money laundering laws. BKEX was founded in 2018 in the British Virgin Islands. During the last 24 hours, its trading volume has been $434.15 million, according to CoinMarketCap.

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