According to local media reports, Hong Kong police arrested two executives of cryptocurrency exchange AAX, accusing them of fraud and misleading the police. Here are the details…
Cryptocurrency exchange AAX executives arrested
Weigao Capital CEO Liang Haoming and former AAX CEO Thor Chan were arrested on December 23. Local officials accused them of arguing that “system maintenance” was being done as an excuse to delay clients from withdrawing their assets due to liquidity issues. It was also alleged that one of the executives had told the police about the timeline of his activities at the company and deliberately misled law enforcement.
AAX’s two bank accounts and the manager’s bank accounts and properties were frozen. A third executive reportedly fled abroad with an AAX wallet and private keys, which police believe contains around $30 million in crypto assets. Their property in Hong Kong was confiscated by the police. As part of the investigation, Hong Kong authorities are working closely with overseas investigators to track down the funds.
The exchange was out of business due to “system maintenance”
The Hong Kong-based platform has been down for “system maintenance” since mid-November. 2 million registered users were unable to access their funds. Since then, local police have received more than 337 reports from victims in China, Taiwan, Italy and France. Withdrawals were halted by AAX on November 14 due to a glitch in the exchange’s system upgrade.
The company reassured its community that the suspension of withdrawals had nothing to do with the collapse of crypto exchange FTX, as rumors suggest. A few weeks later, AAX’s vice president of global marketing and liaison announced his resignation. Ben Caselin confirmed on Twitter that he is leaving the crypto exchange, stating that despite his efforts to work for the community, his proposed initiatives were not accepted. She described her liaison role as “hollow”. In Nigeria, the shutdown of AAX’s operations has led users to harass former employees of the crypto exchange’s Lagos office.
FTX influence continues
AAX issues have flared up with developments due to the FTX crisis. A recent report examining the impact of valuable events in 2022 revealed that FTX’s bankruptcy had the most valuable impact for all. The report covered the collapse of Terra-Luna and the bankruptcies of Voyager, BlockFi, Celsius, Mt.Gox and FTX. According to the numbers, the FTX crash affected more than 1 million investors. This is significantly higher than the 600,000 and 572,000 investors affected by the Celsius and BlockFi bankruptcies, respectively.