AAX Crypto Exchange Withdrawal Halt Sparks Desperate Search for Funds

AAX cryptocurrency investors are seeking senior executives from the exchange after its decision last month to halt withdrawals sparked a backlash among users.

The Hong Kong-based crypto exchange, which once boasted 2 million users, announced to much fanfare in 2019 that it was the first digital asset exchange to use London Stock Exchange trading technology.

But AAX, which stands for Atom Asset Exchange, halted customer withdrawals on Nov. 13 for what it called temporary “scheduled maintenance” to “address serious vulnerabilities.” Exchange employees alleged that the outage was caused by liquidity problems.

The research, conducted by thousands of users via several Telegram messaging groups, underscores the growing desperation among investors in the unregulated industry. According to AAX users, the exchange has since failed to process customer withdrawals, and staff told the Financial Times that they have been disconnected from the company’s messaging systems.

The Hong Kong Monetary Authority, the city’s financial regulator, said the exchange fell outside its jurisdiction, while the Securities and Futures Commission said it had not commented on individual cases. AAX is not one of the few SFC-licensed virtual asset trading platforms.

Hong Kong is a crypto hub, home to the offices of several groups, including Sam Bankman-Fried’s FTX exchange and his crypto trading firm Alameda. Just before the collapse of FTX, Hong Kong had announced plans to legalize retail trading of crypto assets.

AAX Vice President Ben Caselin said on Twitter that he resigned on Nov. 28, citing a loss of trust in management. Caselin, one of the AAX executives that users are looking for to get their funds back, told the FT he was unable to help.

He referred to his previous role as a “spokesperson” who was not involved in the company’s finances. Caselin added that he “felt very unsafe” in Hong Kong but declined to confirm his location.

After the withdrawals were suspended, AAX users created Telegram groups to exchange information and posted leaked photos of top executives’ personal ID documents to try to establish their whereabouts.

“I started noticing there was something suspicious behind this so I did my own investigation,” said Mike Ong, a Singaporean finance executive who is part of the groups. “During this time when they said they were doing maintenance, many central management managers began to remove their online presence.”

In November, AAX users visited the Hong Kong offices to find them deserted. Ong visited the coworking space of the stock exchange in Singapore, but no employees were working there. Telegram groups now have thousands of members, including former staff members who still have money on the exchange.

Some employees were subsequently informed by management that several large cryptocurrency holders withdrew their funds from the exchange following the FTX crisis. Their access to company email and Slack channels has since been disconnected.

AAX did not respond to a request for comment.

Users are specifically trying to contact Victor Su, one of the exchange’s top investors believed to be a senior executive, who was previously based in Hong Kong.

Su refused to reveal his location to the FT and threatened legal action over ‘unrealistic reports’ which had been published against him.

“I don’t have, and I don’t want [abscond], I believe the law will give the best answer,” Su wrote in a text message on Wednesday. “I am also an investor and I lost a lot there.” He did not elaborate further.

“We will continue to put pressure on senior management through our [Telegram] groups,” said a user survey organizer. The groups also tried to report their concerns to police in Singapore, Taiwan and Hong Kong, but Caselin said those efforts were unsuccessful.

“Some people asked me why I didn’t file a complaint with the Hong Kong police,” he wrote on Twitter. “First of all, AAX is a Seychelles-based exchange despite AAX’s roots in Hong Kong, so it’s pointless.”