It has been revealed today that a number of users of Hong Kong-based crypto exchange Coinsuper are not able to withdraw their funds from the platform. According to messages on Coinsuper’s official Telegram channel, this has been ongoing since November.
The dilemma puts a negative light on crypto exchanges, which are at the centre of Hong Kong’s evolving crypto regulation. As part of the new regulations, Hong Kong’s government plans to propose a bill that will make licensing for exchanges mandatory in the 2021-2022 legislative session.
The news was originally reported by Bloomberg on Friday. As per 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 of the exchange has stopped replying to messages.
One trader who has been using Coinsuper since 2018 explained that they had lost access to $20,000 in deposits. The same user has not heard from the administrator since Dec. 1, and has notified the police for further action to be taken.
Coinsuper had $14 million in trading volume in the past 24 hours. This is a tiny fraction of Binance’s $22 billion 24-hour volume. At its peak, Coinsuper handled $1.3 billion in daily volume, which is hugely different to current rates.
One of the venture capitalists that had supported Coinsuper told the Bloomberg reporters 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. At the same time, Chairman and CEO Karen Chen stopped responding on WeChat. Chen is the former president of UBS China.
Between July and December, several employees also left the company, suggesting that problems had already come into light. The exchange, founded in 2017, is backed by Pantera Capital, which still lists Coinsuper as a portfolio company on its website.
