2 crypto exchange AAX executives arrested in Hong Kong: report

Hong Kong police have arrested two executives of crypto exchange AAX on charges of fraud and misleading police, according to local media.

Former AAX CEO Weigao Capital Liang Haoming and AAX Founder Thor Chan were stopped December 23. Local authorities accused the firm’s chief of declaring “system maintenance” as an excuse to delay customers withdrawing assets due to liquidity concerns.

One of the executives also lied to police about the timeline of his activities at the company, deliberately misleading law enforcement authorities, the police investigation found.

Two AAX bank accounts as well as the executive’s bank accounts and properties were frozen. A third executive who fled overseas with an AAX wallet and private keys that police say contain around $30 million in digital assets. His properties in Hong Kong were also seized by the police. As part of the investigation, Hong Kong authorities are working closely with overseas investigators to trace 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, local police have received more than 337 reports of victims in China, Taiwan, Italy and France.

Withdrawals were halted by AAX on Nov. 14, citing an issue in the exchange’s system upgrade. The company assured his community that stopping the withdrawal had nothing to do with the collapse of crypto exchange FTX, as rumors had suggested.

A few weeks later, AAX’s vice president for global marketing and communications announced his resignation. Ben Caselin confirmed on Twitter that he had left the crypto exchange, and said that despite his efforts to fight for the community, the proposed initiatives were not accepted. He described his communication role as “hollow”.

In Nigeria, the shutdown of AAX operations led users harassing former employees of the crypto exchange’s Lagos office.