Employees of a recently closed cryptocurrency exchange arrested in Hong Kong

Hong Kong police have arrested two people on suspicion of fraud and misleading users of the AAX cryptocurrency exchange. Hong Kong’s Commercial Crime Bureau (CCB) will hold a press conference and provide more details about the investigation.

The arrest comes a few weeks after AAX deleted all of its social media accounts after suspending withdrawals, citing a system update bug. The head of AAX in Singapore, Venn Shenghe Chio, also removed all references to AAX from his LinkedIn profile, and the exchange’s vice president, Ben Casselin, resigned from his position, claiming that the exchange’s credibility had been undermined.

AAX suspended withdrawals on November 14, stating that it intended to fix a glitch in its system. However, many clients suspected that this was not the case, and that the actual reason for the halt was the impact on AAX of the FTX exchange closing down. AAX representatives promised to resume operations in a week, but so far, client assets remain locked.

Initially, AAX dismissed these suspicions, saying that the suspension of withdrawals had nothing to do with the FTX collapse and that AAX was not at financial risk. However, the AAX team then stated that it needed additional funding as its investors decided to withdraw their funds due to the FTX fiasco. The situation went so far that in Nigeria, AAX clients attacked employees of the local office demanding the return of their lost assets.