Hong Kong arrests two for suspected involvement in digital asset fraud on AAX

Hong Kong’s commercial crime investigation bureau on Friday arrested two local men for suspected involvement in digital asset fraud on Atom Asset Exchange (AAX), according to a police press conference.

See related article: Troubled Hong Kong crypto exchange AAX unlikely to reopen, says former executive

Fast facts

• On Dec. 23, two men aged 37 and 44 were arrested, with the former additionally charged with “misleading police officers” and the latter charged with fraud.
• “Through false information, news, and illegal means, the trading platform stopped operating, so investors have failed to get back their virtual assets,” said Kung Hing-fun, part of the Commercial Crime Bureau’s Fraud division, during the press conference. 
• Authorities further alleged that AAX suspended user withdrawals for “fault and maintenance,” before the exchange’s senior management left Hong Kong with the company’s crypto wallets and private keys.
• Kung added that other arrests may follow as a result of the ongoing investigation.
• Hong Kong-headquartered, Seychelles-incorporated AAX is among a growing number of crypto companies caught up in the fallout of the collapse of heavyweight exchange FTX, which has seen investors withdrawing their crypto on fears of industry-wide contagion.

See related article: AAX’s future in doubt amid staff exodus and FTX contagion