AAX Exchange Transfers $56 Million from Inactive Wallets, Sparking Concerns

The defunct Atom Asset Exchange (AAX) in Hong Kong has initiated transfers of significant amounts from inactive wallets. Over $56 million worth of Ether has been moved to various trading platforms, casting doubts on the intentions behind these transactions.

Cyvers Alerts, a blockchain analytics company, reported that earlier this month, over 24,000 Ether worth around $55.6 million was transferred from AAX Exchange wallets. Analysts note that the manner of these transactions reflects an attempt to circumvent Anti-Money Laundering (AML) controls. Additionally, it has come to light that a portion of the funds associated with the exchange has been frozen by Tether, adding intrigue to the unfolding events.

Prior to its sudden collapse in November 2022, AAX boasted over 2 million registered users, making it one of Hong Kong's largest cryptocurrency exchanges. The collapse was triggered by the cessation of fund withdrawals and the removal of all social media presence due to counterparty risk vulnerabilities. This action followed another crypto giant, FTX, declaring bankruptcy, highlighting a period of crypto turmoil.

The aftermath of the closure led to arrests by the Hong Kong police of former AAX CEO Tor Chan and board member Haoming Yan, who were apprehended attempting to flee the city during the crisis. However, the exchange's founder, whose identity remains unknown, purportedly remains at large with substantial user funds and crucial wallet private keys.

Efforts are underway by the police to map out the fund transfer trail and return assets to affected users. Hong Kong police swiftly responded to fraudulent activities, arresting two individuals linked to AAX. They continue to caution against cryptocurrency trading risks, particularly in light of recent operational difficulties faced by various platforms.