Hong Kong Coinsuper’s crypto exchange reportedly hit by frozen funds

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HONG KONG (BLOOMBERG) – Clients of a Hong Kong-based cryptocurrency exchange say they cannot withdraw money or tokens from the exchange, and at least seven have reported the matter to police .

Dozens of customers have not been able to make withdrawals from Coinsuper since late November, based on a review of messages on the company’s official Telegram chat.

Five clients told Bloomberg News they filed police reports after withdrawals were apparently frozen, leaving them unable to recover around US $ 55,000 (S $ 74,700) in tokens and cash.

The outcry around Pantera Capital-backed Coinsuper could fuel calls for broader regulatory oversight in Hong Kong.

The head of the city’s securities watchdog said in November 2020 that he will offer a licensing regime for all crypto-trading platforms, an approach that rival Singapore financial center is also pursuing.

Coinsuper executives did not respond to calls and messages seeking comment.

In response to a Bloomberg investigation into the Coinsuper complaints, a Hong Kong police spokesperson said by email that he was investigating a case where a person who purchased cryptocurrency “through a company investment ”has not been able to withdraw its funds since December.

In Coinsuper’s Telegram chat, the admin stopped answering questions about failed withdrawals in late November, and then resurfaced last week to ask affected users for their email addresses.

Some clients said in interviews that there was no follow-up after doing so, and the administrator did not respond to messages from Bloomberg.

Volume drop

Mr. Terry Chan, who works in the city’s financial sector, started using the platform in November 2020 because it was “quite big in Hong Kong” at the time.

He attempted to withdraw US $ 4,000 from the exchange in early December after noticing that the exchanges there were becoming less liquid.

On January 5, he filed a collective complaint with the Hong Kong police along with two other affected Coinsuper customers.

Coinsuper’s trading app remains operational and the exchange traded around $ 18.5 million in volume on Friday, up from a daily peak of $ 1.3 billion at the end of 2019, according to crypto data firm Nomics.

Binance, the largest crypto exchange, processed around $ 51 billion in transactions over the same period, according to data from Nomics.

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