Hong Kong Crypto Exchange Struck with Frozen Funds

Dozens of clients have been incapable of making withdrawals from Coinsuper after late November, based on a review of messages on the firm’s official Telegram chat. Five customers informed Bloomberg News that they’d filed police reports after withdrawals were fixed, leaving them unable to retrieve around a combined $55,000 of tokens and cash.

The uproar about Coinsuper, supported by Pantera Capital, may fuel calls for broader regulatory management in Hong Kong. The head of the city’s securities watchdog in November 2020 stated it would propose a licensing authority for all crypto-trading platforms, an approach rival financial hub Singapore is also seeking.

Coinsuper executives didn’t reply to calls and messages pursuing comments in response to a Bloomberg investigation regarding the Coinsuper complaints, a Hong Kong police spokesperson told by email that it’s investigating one case where a person who bought cryptocurrency “via an investment company” was unfit to withdraw her funds since December.

In Coinsuper’s Telegram chat, the administrator quit responding to queries regarding failed withdrawals in late November. However, then resurfaced in the past week to ask involved users to provide their email addresses. Some clients stated in interviews that there was no follow-up after doing so. The administrator didn’t reply to messages from Bloomberg.

Volume Slump

Terry Chan operates in the city’s financial industry. He began using the platform in November 2020 because it was pretty extensive in Hong Kong at the time. He attempted to withdraw $4,000 from the exchange in early December after catching that trading there was becoming less liquid. On Jan. 5, he filed a group complaint to Hong Kong police and two other affected Coinsuper clients.