AAX exec flees with $30 million, two arrested in Hong Kong

The Hong Kong police reportedly arrested two executives of the now-defunct AAX crypto exchange on charges of defrauding and misleading users.

AAX

According to a report by local news outlet HK01, former executive Liang Haoming and Thor Chan, founder and ex-chief executive officer, were arrested a couple of weeks after AAX halted customer withdrawals. They are accused of claiming the indecent was due to a “system upgrade glitch” as an excuse to delay customers from withdrawing assets amid liquidity issues.

According to a press release from the police, the case involves $17 million of total reported loss by a total of 337 victims who had already contacted Hong Kong Commercial Crime Bureau (CCB) since November. Atom Asset Exchange (AAX) had more than 2 million users worldwide in November, authorities said.

Police’s investigation found that a third executive fled overseas with private keys and a cryptocurrency wallet, which stores $30 million worth of crypto assets. Described as the ‘mastermind,’ Hong Kong authorities have seized his assets in the country as part of the investigation.

The move comes just weeks after AAX deleted all of its social media accounts after halting customer withdrawals. At the time, the exchange said the move wasn’t part of a broader limit on activity in the wake of rival FTX’s collapse, which has caused chaos in the industry. It also confirmed that it had no financial exposure to FTX and its affiliates.

Instead, the crypto exchange cited the failure of a third-party partner, which caused some users’ balance data to be improperly recorded while scheduling a system upgrade. Hence, AAX halted its services to prevent further risks, while the technical team has had to manually proofread and restore the system to ensure accuracy of all users’ holdings.

As the events unfolded, AAX Singapore CEO Wenn Shenghe Chioh removed all mentions of AAX from his LinkedIn profile, while Ben Caselin, its vice president for global marketing and communications, stepped down from his role.

In a twitter thread, Caselin, who held senior marketing roles with the exchange since 2019, announced his resignation and cited disagreement with the management over how they are handling the current issues.

“People, including my own family ask me for help, but there is nothing I can do. Everyone is waiting on actions. I still believe things will be handled without evil intentions, but the damage is done. The brand is no more and trust is broken,” he wrote.

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