Recent developments continue to emerge in the crypto market following notable bankruptcy processes. Accordingly, a Hong Kong-based cryptocurrency exchange, which has declared bankruptcy, reportedly began transferring funds from its wallets to various decentralized exchanges and centralized platforms to evade Anti-Money Laundering (AML) checks.
Activity Detected at Bankrupt Exchange
According to data released by blockchain analysis firm Cyvers Alerts on February 20, since the beginning of this month, Atom Asset (AAX) Exchange wallets have transferred over $55.6 million worth of more than 24,000 Ethereum to different platforms. Analysts commented on the issue:
“The observed patterns indicate that the address is trying to avoid AML tools. Additionally, some funds originating from the exchange were blacklisted by Tether.”
The aforementioned transfers were noticed before the last known transactions involving AAX Exchange wallets occurred in October 2023 and November 2022. Prior to its bankruptcy process, AAX was one of the largest crypto exchanges in Hong Kong with over 2 million users.
The Bankruptcy Process of AAX
Just two days after the cryptocurrency exchange FTX filed for bankruptcy on November 13, 2022, AAX also suspended withdrawal operations due to counterparty risk and deleted all social channels. The Cyvers Alerts team stated:
“On December 16, 2022, both its website and application ceased operations. Initially, AAX linked the freeze to security measures in response to allegations of malicious attacks.”
Following its closure, former AAX CEO Thor Chan and board member Haoming Liang were arrested by Hong Kong police in 2022 for allegedly attempting to flee the city. Moreover, the identity of AAX’s founder remains unknown, and they are still at large, accused of having access to investor funds worth $29.41 million USD and private keys to exchange wallets. As of the time of publication, the exchange’s website is currently offline, and its Twitter account has not been updated since November 2022.
