Hong Kong police have detained two executives from cryptocurrency exchange AAX on charges of fraud and misleading the police, local media reports.
Former AAX CEO Weigao Capital Liang Haoming and AAX founder Thor Chan were detained on December 23. Local authorities accused the head of the company of declaring “system maintenance” as an excuse to delay clients withdrawing assets amid liquidity problems.
One of the executives also lied to police about the timeline of his activities at the company, deliberately misleading authorities, the police investigation revealed.
Two AAX bank accounts have been frozen, as well as the executive’s bank accounts and properties. A third executive fled abroad with an AAX wallet and private keys that police say contain about $30 million in digital assets. The police also seized his property in Hong Kong. As part of the investigation, Hong Kong authorities are working closely with foreign investigators to locate the funds.
The Hong Kong-based platform has been shut down since mid-November for “system maintenance”, leaving 2 million registered users without access to their funds. Since then, the local police have received more than 337 complaints from victims from China, Taiwan, Italy and France.
AAX halted withdrawals on November 14, citing a glitch in the exchange’s system update. The company assured its community that the suspension of withdrawals had nothing to do with the collapse of FTX, as rumors had suggested.
A few weeks later, AAX’s vice president of global marketing and communications announced his resignation. Ben Caselin confirmed on Twitter that he had left the cryptocurrency exchange, stating that despite his efforts to fight for the community, the proposed initiatives were not accepted. He described his role in communication as “hollow”.
In Nigeria, the closure of AAX operations led users to harassing former employees of the Lagos office of the cryptocurrency exchange.
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