Hong Kong police arrested two executives of the crypto exchange AAX accused of fraud and misleading the police, according to local media reports. Weigao Capital CEO Liang Haoming and former AAX CEO Thor Chan were arrested on Dec. 23. Local authorities accused them of claiming there was “system maintenance” as an excuse to delay customers from withdrawing assets amid liquidity issues. One of the executives also allegedly lied to the police about the timeline of his activities in the company, deliberately misleading law enforcement. Two bank accounts of AAX as well as the executive’s bank accounts and properties have been frozen. A third executive reportedly fled overseas with an AAX wallet and private keys that police believe contain around $30 million in digital assets. His properties in Hong Kong were seized by the police. As part of the investigation, Hong Kong authorities are working closely with overseas investigators to trace the funds.The Hong Kong-based platform has been shut down since mid-November for “system maintenance,” leaving 2 million registered users without access to their funds. Since then, local police have received over 337 reports from victims in China, Taiwan, Italy and France.Withdrawals were halted by AAX on Nov. 14, citing a glitch in the exchange’s system upgrade. The company assured its community that the withdrawal halt had nothing to do with the collapse of crypto exchange FTX, as rumors had suggested. A few weeks later, AAX’s vice president for global marketing and communications announced his resignation. Ben Caselin confirmed on Twitter that he had left the crypto exchange, stating that despite his efforts to fight for the community, the initiatives he proposed were not accepted. He described his communications role as “hollow.”In Nigeria, the shutdown of AAX‘s operations led to users harassing former employees of the crypto exchange’s Lagos office.
