The defunct Atom Asset Exchange (AAX) in Hong Kong has started moving large amounts from inactive wallets. Ether worth over $56 million has been moved to different trading platforms, which has caused doubts about the objective of these transactions.

Funds Movement Sparks Concern

Cyvers Alerts, a blockchain analytics firm, reported that over 24,000 Ether, worth about $55.6 million, began to be moved from AAX Exchange wallets at the beginning of this month. 

Analysts point out that the manner of these transactions reflects an effort to evade Anti-Money Laundering (AML) controls. Additionally, it has become known that part of the funds linked with the exchange has been frozen by Tether, making the unfolding event more intriguing.

Before its abrupt failure in November 2022, AAX had over 2 million registered users, making it one of Hong Kong’s largest crypto exchanges. The collapse was caused by the cessation of withdrawals and erasure of all social networks due to exposure to counterparty risks. This action followed the bankruptcy filing of another crypto behemoth, the FTX, emphasizing a period of crypto chaos.

Arrests and Allegations

The fallout of the shutdown led to the arrests of AAX’s ex-CEO, Thor Chan, and board member Haoming Liang, by the Hong Kong police. They were arrested for trying to escape the city during a crisis. Despite this, the exchange’s founder, whose identity is yet unknown, is alleged to be at large with large amounts of user funds and the vital private keys to the exchange’s wallets.

This has left 2 million AAX users unable to access their accounts or withdraw their assets. Complaints from victims worldwide, including mainland China, Taiwan, Italy, France, and others, have been received with losses totaling HK$98 million. The police investigation established a deceitful ploy where system maintenance was falsely claimed to stop asset withdrawal, resulting in vast sums of money being lost.

Hong Kong Police Action and Asset Recovery

Police have promptly taken action in response to the fraudulent activities and arrested two people related to AAX. Ongoing efforts are being pursued to map the path of the transferred funds and retrieve the affected users’ assets. The police have also warned about the risks associated with cryptocurrency trading, especially in light of recent operational difficulties faced by various platforms.

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Kelvin is a distinguished writer specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive analysis and insightful content, he has an adept command of English and excels at thorough research and timely delivery.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.