Hong Kong-based Coinsuper Users Can’t Withdraw Funds

Hong Kong-based Coinsuper Users Can’t Withdraw Funds

A Bloomberg report has revealed that customers of Coinsuper, a Hong Kong-based cryptocurrency exchange, cannot withdraw their money or assets like Bitcoin, Ethereum from the platform. Some of the complainants have gone as far as reporting the situation to the police.

Coinsuper Users Can’t Withdraw Funds

Available information from Bloomberg obtained via Coinsuper’s official group chat on Telegram noted that the platform has deactivated its withdrawal option since November last year.

According to the report, the group’s administrator had stopped responding to messages in the month before recently resurfacing to ask for the emails of the affected users.

An affected user of the platform, Terry Chan, said that he had filed a group complaint with the police with two other users who suffered the same fate as him.

Per Chan, he tried withdrawing around $4000 from the exchange in December after noticing that the platform was becoming illiquid.

The police also confirmed that they were currently handling a complaint involving a person who had bought crypto via an unnamed investment company but had not been able to withdraw funds since December.

What Could be Causing This Problem?

While Bloomberg was unable to pinpoint the major cause of this problem for the Pantera Capital-backed exchange, it noted that the trading volume on the platform has dropped to new lows in recent times.

Per the report, the exchange saw a transaction volume below $20 billion in the last 24 hours, a negligible fraction of what the largest crypto exchange by trading volume, Binance, handled. In previous times, the crypto firm had handled over $1 billion worth of transactions in a day.

Apart from this, an unnamed venture capital who invested over $1 million in the firm disclosed that it has not been in touch with the exchange for the past 8 months as the top management, led by former UBS China Inc. President Karen Chen, has not been responding to messages.

Also, data from Hong Kong’s Companies Registry would show that the firm lost a retinue of workers during the second half of last year.

What This Means for Crypto Trading Regulations in Hong Kong

With Coinsuper unable to fulfill its obligations to its clients, this could lead to more comprehensive calls for regulations in the nascent crypto industry in the region.

Presently, crypto regulations in Hong Kong are lax as it allows exchanges to choose whether to be regulated or not. Due to the stringent regulatory measures, most crypto exchanges tend to remain unregulated.

But with exchanges facing recurring long withdrawal times, it is only a matter of time before the region forces crypto exchanges to register with the authorities.

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