Dozens of clients of the Hong Kong-based cryptocurrency exchange Coinsuper have reportedly complained that they could not collect funds on the platform. At least seven of them contacted the police about it.
Frozen Funds on Coinsuper
According to a January 7 Bloomberg coverage, the problem has occurred in late November. Five of the trading venue’s customers explained to the media that they are unable to withdraw a total of $55,000 (an amount consisting of both digital assets and cash). Looking for a solution to their problem, they have even filed reports to the local authorities.
Coinsuper executives could not be found to comment on the matter. Additionally, the exchange’s Telegram chat admin has stopped responding to queries about failed transactions over a month ago. However, last week the admin asked affected customers to provide their email addresses. Still, some of the users revealed that there was no follow-up to this action.
A Hong Kong police spokesperson said the officials are investigating another similar case. An individual who purchased cryptocurrencies “via an investment company” was unable to retrieve her funds since December last year.
For the moment, the Coinsuper trading application remains functional. It even processed around $ 18.5 million in volume in the last 24 hours.
Hong Kong’s Crypto Environment
The special administrative region of China – Hong Kong – uses a so-called “opt-in” regulatory regime for digital asset trading venues, meaning they can apply to get supervised. According to Joshua Chu – a consultant at ONC Lawyers – this model is not particularly effective, and the city might change its policy soon.
Last year, local lawmakers intended to enforce a rule that would only allow millionaires to trade with digital assets in the mega-city. Christopher Hui – Hong Kong’s treasury secretary – endorsed the government’s plan, saying it was a well-considered move and the consequences could benefit the city.
Previous Issues with Coinsuper
Founded in 2017 and run by Karen Chen – a former executive at UBS Group AG – the platform has had a controversial history. At one point, a partner at one of the company’s venture capital backers, who did not identify himself, revealed his firm has written off its entire $1 million investment allocated at Coinsuper.
Almost six months later, his entity lost contact with the trading platform, while Chen stopped responding on WeChat. Additionally, many employees left Coinsuper between July and December of last year.
Pantera Capital, managed by veteran bitcoin investor Dan Morehead, is one of the platform’s early backers. Back in 2018, it led a Series A funding round as the amount was undisclosed.
