AAX Mastermind Arrested, Faces Court Over Alleged $26 Million Fraud

The mastermind behind the collapse of the digital currency platform AAX has been arrested after evading authorities for 20 months.

According to a recent report by Oriental Daily News, the 39-year-old man was apprehended upon re-entering Hong Kong on July 18. He is set to appear in Eastern Law Court on July 20 to face charges related to a $26 million fraud.

AAX’s Collapse and $26 Million Fraud

The local cryptocurrency exchange AAX ceased operations in November 2022, leaving over 300 customers unable to withdraw approximately $12.8 million in assets.

Authorities discovered the shutdown was orchestrated through false information and illegal methods, prompting an extensive investigation.

On December 23, 2022, law enforcement authorities arrested two local men on suspicion of fraud, with one of them also suspected of misleading police officers.

During the investigation, law enforcement agencies froze assets totaling approximately $256,100 in the bank accounts of the involved company and suspects, as well as properties valued at $7 million.

It was later discovered that the AAX’s mastermind behind the scheme had already fled Hong Kong with his crypto wallet and private keys. This individual managed the digital currency platform and orchestrated its collapse through false information and illegal means.

The man left Hong Kong in November 2022 and was arrested when he re-entered. As of today, law enforcement agencies have received reports from 890 victims, involving a total amount of $26 million.

Hong Kong SFC Cautions Against Exchanges

Recently, the Hong Kong Securities and Futures Commission (SFC) has identified seven crypto exchanges operating without authorization and has added them to its Alert List for conducting activities in the region without the necessary licenses.

The public record, known as the Alert List, has been maintained since January 2020. On July 5, seven new unlicensed exchanges were added, increasing the total to 39 entries. This year alone, 28 unlicensed crypto exchanges have been flagged.