Crypto Exchange Backed by Tether Freezes Withdrawals After $7M Moves Out

Orionx is winding down its operations, while Chile’s regulator says it lacks the authority to compel the exchange to reimburse customers.

Tether-backed Orionx is winding down operations, with customer withdrawals frozen after more than $7 million was transferred out of its custody.

The Chilean crypto exchange said a forensic audit revealed that customer assets had been moved to wallets outside its control, leading it to initiate a permanent shutdown and halt withdrawals while it assesses how much can be returned.

The failure occurred less than a year after Tether invested in Orionx in June 2025, following an earlier investment by its affiliated exchange Bitfinex in 2023. Tether’s funding was intended to help Orionx expand its operations across Latin America.

Customers now face a more uncertain outcome. Chile’s Comisión para el Mercado Financiero said it cannot supervise Orionx’s shutdown or compel the exchange to return customer assets, leaving users reliant on the company’s restitution process or possible legal action.

Orionx said withdrawals were frozen to stop early movers from recovering assets at the expense of customers who remain. Its closure tracker remains at the first of five stages, with account reconciliation and approval of a restitution plan still required before funds can be returned. No repayment date has yet been announced.

Customers Face Recovery Without Regulatory Protection#

The CMF’s limited authority is linked to Orionx’s regulatory status.

The agency rejected the exchange’s registration and authorization application on June 19, bringing an end to the transitional arrangement that had allowed operations while the application was under review.

From that point onward, Orionx was limited to winding down its existing business rather than pursuing new regulated activities.

The regulator said Orionx was neither registered nor authorized under Chile’s Fintech Act and had not demonstrated that it had obtained the collateral required from approved providers.

This means the CMF can direct customers to Orionx and the courts, but it cannot force the exchange to repay them.

Orionx has said its priority is to return as much customer property as possible “as quickly and fairly” as circumstances allow. The exchange also notified prosecutors about the transfers and filed a criminal complaint dated Sept. 2 against former executives. However, those allegations have not established who was responsible for the missing assets.

The more pressing concern for customers is determining how much of the asset pool can actually be recovered.

Orionx must still reconcile individual customer balances, assess the assets available for recovery, and approve a distribution plan before restitution can begin. The exchange’s own tracker indicates that these steps are still pending.