Beaxy Exchange CEO Disappears, Fears of Insolvency Resurface
The widely shilled exchange seems to be pulling an exit scam, with no sign of its CEO.
The Beaxy exchange may be the latest exit scam in crypto projects. The market operator only appeared this summer, promising to become “the Binance killer”. However, in the past few days, its CEO, Artak Hamazaspyan, has been missing.
Even after he tweeted that he had a “family emergency”, there were those that disbelieved the real reason, still expecting an exit scam.
Since mid-September, @just_artak has not tweeted. In the meantime, Beaxy was widely shilled for its reward programs, and was cheeky enough to advertise itself under the tweets of Changpeng “CZ” Zhao, CEO of Binance.
Beaxy met its first bout of troubles with a significant hack in August. The Beaxy exchange was targeted in a “partial spend” exploit, as Cryptovest reported earlier. The exploit, which has a similar effect to double-spending, cost the exchange 46 BTC and 111,000 XRP.
With or without an exit scam, Beaxy has done plenty of damage. The exchange decided to gain popularity through a Twitter-based referral program, attracting significant inflows from new traders.
Beaxy, however, reached nowhere the status of Binance. The exchange only carries a measly $51,000 in volumes. And after the CEO’s disappearance was noted, the price of BXY, its native token, tanked even deeper.
But the most serious repercussion is that Beaxy may be now insolvent and incapable of paying out user funds. With so many BTC lost, the exchange has hardly regained its legs, in case traders want to withdraw. The Beaxy event further underlines the danger of small-scale exchanges, especially those built without the requisite security. Reportedly, Beaxy failed to notice the XRP partial spending for about a week.
While the losses were much smaller, Beaxy recalled the failure of QuadrigaCX. Lack of communication and reassurance may be fatal for an exchange. Luckily, Beaxy had only added 17 trading pairs, and the damage may be limited.
The BXY token, thinly traded with volumes of $35,000 in 24 hours, fell by 50% to about 100 Satoshi, and $0.008, down also by half. BXY only started trading at the end of September, before it ended up wiping out most of its value.