$56 million moved out of service after executives flee: Report

The defunct Hong Kong exchange has begun moving funds from its wallets to various decentralized exchanges and centralized platforms, allegedly to circumvent anti-money laundering (AML) controls.

More than 24,000 Ether (ETH), worth $55.6 million, has moved from the Atom Assets (AX) exchange wallet since the beginning of this month, according to blockchain analytics firm Syvers Alerts on February 20. “The observed patterns indicate that the addressee is trying to avoid AML devices,” the analysts wrote. “In addition, some funds from the exchange were blacklisted by Tether.”

Prior to its availability, the last known transactions involving AAX exchange wallets took place in 2018. It is in October 2023 and November 2022. Before its collapse, AAX was one of the largest crypto exchanges in Hong Kong with over 2 million users.

In the year On November 13, 2022, two days after crypto exchange FTX filed for bankruptcy, AAX stopped withdrawing funds and shut down all social channels due to perceived risk exposure. “On December 16, 22, both the website and the app went down,” Syvers wrote. “Initially, AAX caused the freeze in response to malicious attacks on security measures.”

* User funds are not directly at risk. All energy will now be spent on getting AAX to a level where we can ensure first-tier users can get their money back, and second-tier services once they're up and running.

— AAX (@AAXExchange) November 14, 2022

Following the closing, AAX's former CEO Thor Chan and board member Haoming Liang announced in 2015 that They were arrested by Hong Kong police for allegedly trying to flee the city in 2022. However, the unidentified AAX founder is said to be still on the run with the private keys containing an estimated HK$230 million ($29.41 million) of users' money and wallets. At the time of publication, the exchange's website is currently offline and its Twitter account has not been updated since November 2022.

Related: Hong Kong exchange license transparency attracts traditional brokers