Recent revelations indicate that a Hong Kong-based cryptocurrency exchange, despite declaring bankruptcy, has engaged in the relocation of assets to various decentralized and centralized exchanges. This maneuver is interpreted as an attempt to circumvent Anti-Money Laundering (AML) regulations.
Unusual Transfer Patterns Detected
Blockchain analysis firm Cyvers Alerts uncovered on February 20 that since early February, the Atom Asset (AAX) Exchange has moved a substantial sum exceeding $55.6 million, which converts to more than 24,000 Ethereum units, across different trading platforms. This activity is raising alarms with analysts suggesting that these patterns are consistent with efforts to avoid AML detection mechanisms. Additionally, Tether has flagged some of these transferred funds as originating from the exchange.
AAX’s Downfall and Legal Troubles
Before halting operations, AAX was a major player in Hong Kong’s crypto space, boasting a user base of over 2 million. The transfers in question predate the last recorded transactions made by AAX Exchange wallets, which took place in the latter part of 2023 and November 2022. The exchange’s difficulties compounded shortly after FTX’s bankruptcy when AAX halted withdrawals on November 15, 2022, due to counterparty risks, and subsequently went silent on all social media platforms. Furthermore, the exchange faced operational shutdowns on December 16, 2022.
In the aftermath, authorities apprehended AAX CEO Thor Chan and board member Haoming Liang under allegations of trying to escape Hong Kong. Compounding the intrigue, the identity of the exchange’s founder remains a mystery, and they are wanted for purported access to investor funds nearing $29.41 million USD, along with the private keys to the exchange’s wallets. Currently, AAX’s website is inactive, and their Twitter account has seen no updates since November 2022.