A defunct exchange based in Hong Kong has recently come under scrutiny for its suspicious movement of funds from its wallets to both decentralized and centralized platforms. The exchange, Atom Asset (AAX), reportedly initiated the transfer of more than 24,000 Ethereum assets valued at $55.6 million earlier this month. According to blockchain analytics firm Cyvers Alerts, this activity is seen as an attempt to circumvent anti-money laundering (AML) controls. The analysts highlighted that the observed pattern indicates a deliberate evasion of AML measures, further noting that some of the funds originating from the exchange have been blacklisted by Tether.
Before this recent activity, the AAX exchange had been dormant in terms of transactions since October 2023 and November 2022. Once regarded as one of Hong Kong's largest cryptocurrency exchanges with over 2 million users, AAX faced a dramatic downfall. On November 13, 2022, shortly after the cryptocurrency exchange FTX filed for bankruptcy, AAX halted withdrawals and ceased all communication on its social channels, citing counterparty risk exposure. Subsequently, on December 16, 2022, both the exchange's website and app went offline. Initially, AAX attributed the freeze to security measures against an alleged malicious attack.
The situation surrounding AAX worsened as former CEO Thor Chan and board member Leung Ho-ming were apprehended by Hong Kong authorities in 2022 on suspicion of attempting to flee the city following the exchange's closure. Despite these arrests, the founder of AAX, whose identity remains undisclosed, is reportedly still at large, holding user funds worth HK$230 million ($29.41 million) along with private keys granting access to the exchange's wallet. Presently, the AAX website remains inaccessible, and its Twitter account has not been updated since November 2022, leaving users and observers uncertain about the fate of their assets and the exchange's future.
