Clients of Hong Kong crypto exchange file police reports as their funds remain frozen

By Sharan Phillora

January 10, 2022

Customers of CoinSuper, a Hong Kong-based cryptocurrency exchange, backed by Pantera Capital, filed a police report after their funds on the exchange were frozen.

According to Bloomberg, dozens of clients who had deposited Bitcoin and other cryptocurrencies on CoinSuper complained that they could not obtain their withdrawal of assets since late last November.

However, five customers in a statement to Bloomberg said that they have filed police reports after their withdrawals seemed to be frozen that comprised of a combined US$55000 of token and cash.

Here’s the story so far:

In November 2021, while many users dropped in additional queries regarding the failed withdrawals on the CoinSuper Telegram chat, the administrator stopped responding and later re-surfaced to ask impacted users to share their email addresses.

Some clients in other interviews have also stated that no follow-up was done by the administration of CoinSuper and nor did they respond to any messages from Bloomberg.

According to a report released by CoinDesk, one of the company’s traders claimed that lost $20,000 deposit, and even though he notified the CoinSuper authorities he hasn’t received any reply to his inquiry.

Mr. Terry Chan, an employee of the city’s financial industry, in conversation with Bloomberg, said that he started using CoinSuper back in December 2020 since it was “quite large in Hong Kong” at the time. However, he too faced a failed withdrawal of US $4000 from the exchange and is among those who filed a complaint.

CoinSuper is run by former UBS China Inc president Ms. Karen Chen who says that she still remains a minority investor in the company. However, the latest annual report filed with the companies registry in October 2021 lists Ms. Chen as CoinSuper’s biggest individual shareholder.

A partner at one of CoinSuper’s venture capital backers, who did not want to be identified, said that the firm wrote off its entire investment of around $1 Million. And around six to eight months ago, the firm lost contact with CoinSuper’s management and Ms. Chen stopped responding on WeChat.

According to data from Hong Kong Companies Registry, several employees resigned and left the company between July and December.

According to Nomics, CoinSuper’s trading app is still operational and the exchange handled around US$18.5 million in volume on Friday, January 7th, 2022. This was a downward graph from its daily peak of US$1.3 billion in late 2019.

Hong Kong has an “opt-in” regulatory policy for crypto exchanges. This means they can apply to be regulated. However, strict regulations make that route “not very appealing for platforms”, according to Joshua Chu, a consultant at ONC Lawyers in Hong Kong.

Pantera Capital, led by Dan Morehead did not respond to requests for comments, according to reports. In June 2018, Pantera Capital was a part of CoinSuper’s Series A funding round. And even today, Pantera’s website continues to list the crypA partner at one of CoinSuper’s venture capital backers, who did not want to be identified, said that the firm wrote off its entire investment of around $1 Millionto exchange as one of its investments.

The last major announcement by CoinSuper was made through Twitter in September 2021. The announcement was regarding the addition of Solana token and Tether stablecoin to the exchange.

Since December 1, 2021, the crypto exchange has been inactive across all of its social media accounts.


About the author:

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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