Bkex Halts Withdrawals After Suspected Money Laundering by Users

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• Crypto exchange Bkex has suspended all withdrawals after suspected money laundering on the platform
• The exchange said withdrawals would be closed while a police investigation is carried out
• The move could be the first time that an exchange has shut off all withdrawals because of the actions of a few users

Cryptocurrency exchange Bkex has temporarily ceased withdrawal operations following an accusation that one of its users may have been engaged in money laundering activities. Bkex, which is headquartered in the British Virgin Islands, pledged to cooperate fully with law enforcement authorities and aid in their investigation by gathering crucial evidence. In the meantime, Bkex has taken the decision to suspend withdrawal services.

Bkex to Work With Police

Bkex published a blog post yesterday where it explained the move, saying that its team will “actively work with the relevant authorities to resolve the current issues faced.” The move is possibly the first time that an exchange has halted all withdrawals on the basis that a small number of users have been using it illegally, but it has to be assumed that this is necessary in order to gather data and not risk further illegal use.

Bkex added that it will work to “ensure that the rights of our users are protected to the greatest extent possible,” suggesting that police will be sifting through the records of suspects and non-suspects alike.

First Time?

Perhaps unsurprisingly, the decision was met with annoyance from Bkex users, who were surprised at the suspension of all withdrawals:

First time I see an exchange that stops all withdrawals for a few that are doing wash trade. this is unacceptable as a service

— Cristian Mesa (@Cristia68402033) May 29, 2023

Bkex’s decision is almost certainly the first time a crypto exchange has halted withdrawals for all customers based on the actions of a few users, and there will be concern among others that a police investigation will keep them shuttered for a lengthy period. Even when they do reopen, it remains to be seen if the exchange will have an extra burden placed on it to prevent the same thing from happening again.