Multiple users of Hong Kong-based exchange Coinsuper have been unable to withdraw funds from the platform since late November, according to messages on Coinsuper’s official Telegram channel.
The fiasco sheds a negative light on crypto exchanges, which are at the center of Hong Kong’s evolving crypto regulation. The government plans to propose a bill that will make licensing for exchanges mandatory in the 2021-2022 legislative session.Bloomberg first reported the news on Friday. According to the Bloomberg article, at least seven people have filed police reports, and the Hong Kong police is investigating the case of a person who bought crypto “via an investment company” and has been unable to withdraw money since December.On the Telegram channel, the administrator has stopped replying to messages.One trader who has been using Coinsuper since 2018 told CoinDesk that they had lost access to $20,000 in deposits, haven’t heard from the administrator since Dec. 1, and so have notified the police.Coinsuper had $14 million in trading volume in the past 24 hours, a tiny fraction of Binance’s $22 billion 24-hour volume, data from CoinMarketCap shows. At its peak in late 2019, Coinsuper handled $1.3 billion in daily volume, Bloomberg wrote.One of the venture capitalists that had backed Coinsuper told Bloomberg that they had completely written off their $1 million investment in the exchange. Six to eight months ago, the VC lost contact with the exchange’s management team, while Chairman and CEO Karen Chen stopped responding on WeChat, Bloomberg said. Chen is the former president of UBS China.Between July and December, several employees also left the company, according to the report.The exchange, founded in 2017, is backed by Pantera Capital, which still lists Coinsuper as a portfolio company on its website.