Hong Kong Crypto Exchange AAX in Crisis as FTX Debacle Forces Withdrawal Freeze

• AAX staff became incommunicado after the crypto exchange removed social media pages and suspended withdrawals, confirming Hong Kong’s FTX exposure.
• The exchange saw its former research head resigning this week, stating that the firm handled things without empath while being overly opaque.

Hong Kong crypto exchange AAX becomes the recent victim of FTX’s fall this month, leaving clients and investors in limbo as the event confirmed the town’s exposure to a space it recently contemplated about better regulation.

AAX (Atom Asset Exchange) has closed its doors after deleting its social media pages and freezing withdrawals. Moreover, the team is incommunicado. Distressed investors formed multiple groups on Telegram, with over 1K users demanding about whereabouts of the AAX team.

Adding to the woes, the former exec, who attended FinTech Week Hong Kong this month, tweeted about his resignation on Monday, stating that the company ignored all initiatives to fight for market participants.

AAX former executive Ben Caselin stated that the exchange handled things with opaqueness and without empathy. He added that the firm could still take things without evil motives, though the damage is complete and trust broken.

Also, this week saw AAX’s Facebook page and YouTube account disappearing. Previously, AAX sponsored South China Morning Post content. While the losses of the AAX debacle remain unknown, the platform’s closure brings a warning for Hong Kong’s goal to be a crypto hub.

AAX founded its crypto exchange a year after the company’s 2018 launch. That was after Hong Kong’s SFC (Securities & Futures Commission) revealed a regulatory framework to govern crypto trading platforms. Its CEO Thor Chain commented (in 2019) that the platform welcomed industry regulation though part of the space will stay unregulated for some time.

While FTX’s bankruptcy crisis spread in the crypto space, AAX said (on 15 November) it suspended withdrawals due to acute pressure on capital position. Meanwhile, it guaranteed investors they hadn’t compromised funds and planned to raise more cash.

The FTX crisis continues to rattle the cryptocurrency world. Recently, BlockFi filed for insolvency, citing its FTX exposure. Moreover, Hbit, Huobi Global’s subsidiary, stated that it could not withdraw cryptos worth $18.1 million deposited in FTX.

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