AAX’s Freeze on Withdrawals Causes Panic and Vice President Resigns

Crypto exchange AAX’s freeze on withdrawals has sparked desperate search for funds.

Cryptocurrency investors in AAX are looking for the exchange’s senior executives after its decision to halt withdrawals last month, which has sparked a backlash among users.

The Hong Kong-headquartered crypto exchange, which once boasted two million users, announced with much fanfare in 2019 that it was the first digital asset exchange to use the London Stock Exchange’s 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 critical vulnerabilities.” Exchange employees alleged that the outage was due to liquidity issues.

The discovery, conducted by thousands of users across multiple Telegram messaging groups, underscores growing investor frustration with the unregulated industry. According to AAX users, the exchange has since failed to process customer withdrawals, and staff told the Financial Times that they had been disconnected from the company’s email systems.

The Hong Kong Monetary Authority, the city’s financial regulator, said the exchange did not fall under its purview, while the Securities and Futures Commission said it did not comment on individual cases.

AAX is one of the SFC’s few licensed virtual asset trading platforms.

Hong Kong is a crypto hub, housing offices for several conglomerates, including Sam Bankman-Fried’s FTX exchange and his crypto trading company Alameda. Before FTX’s collapse, Hong Kong hinted at plans to legalize retail trading of crypto assets.

AAX Vice President Ben Casselin said on Twitter that he resigned on November 28, citing a loss of confidence in management. Casselin, one of the AAX Executive users who are looking to recover their funds, told the FT he was unable to help.

He described his previous role as a “spokesman” who was not involved in the company’s financial affairs. Casselin added that he “felt very unsafe” in Hong Kong but declined to confirm his location.

After the withdrawal was halted, AAX users set up Telegram groups to exchange information and posted leaked pictures of senior officials’ personal identification documents to try and establish their whereabouts.

“I started noticing something suspicious behind all this, so I did my own investigation,” said Mike Ong, a Singaporean financial executive who is part of the group. “In that period when they said they were doing maintenance, a lot of key management started deleting their online presence.”

In November, AAX users visited the Hong Kong office only to find it deserted. Ong visited the exchange’s Singapore co-working space but no employees were working there. Telegram groups now have thousands of members, including former staff members who still have money in the exchange.

Some employees were later told by management that several large cryptocurrency holders had pulled their funds from the exchange in the wake of the FTX crisis. His access to company email and Slack channels has since been disconnected.

AAX did not respond to a request for comment.

Users are particularly trying to contact Victor Su, one of the exchange’s main investors who is considered a senior executive, and previously lived in Hong Kong.

Sue refused to reveal her location to the FT and threatened legal action over “untrue reports” published against her.