Financial regulators are cracking down on cryptocurrency after crypto exchange BitForex went down in February.

Hong Kong has been policing the crypto industry and trying to establish a legitimate digital asset marketplace in its own country. The Hong Kong regulators who oversee futures and securities markets have issued a statement to the public about BitForex and the risks that they perceive for users on that exchange.

They suspect the exchange is committing fraud, and on Monday, they went after the Hong Kong-based crypt exchange. BitForex has a base in Hong Kong but has not been licensed by the SFC, according to Hong Kong regulators. They also have not applied for a VATP (virtual asset trading platform) license that would be required for them to conduct the exchange of digital currencies.

This statement has been issued in response to BitForex suffering serious outages in February following the withdrawal of$57 million from the platform’s hot wallets. The SFC in Hong Kong asked the country’s police to cut off access to the BitForex platform and the social media pages for the company after the outage.

BitForex users were seeing error messages when they tried to access their accounts. In many instances, their account balances were showing up as zero even when they were supposed to have money there.

Major Problems for BitForex

BitForex has been flagged by regulators in Japan already, which occurred last year. Now, Hong Kong is moving to cast doubt on their legitimacy and the reasons for the outage.

Hong Kong has opened up its digital marketplaces and allows crypto exchanges to enter the country and do business there. However, it has also been arresting crypto traders for incidents on the exchange JPEX. While Hong Kong is presenting a face of openness to reticence, it is also cracking down hard on any exchange it sees violating its regulations.