Hong Kong cryptocurrency exchange froze withdrawals amid arrest of its co-founder by the authorities Hong Kong cryptocurrency exchange CEO Global announced the arrest of its co-founder by the authorities.

Hong Kong crypto exchange froze withdrawals amid arrest of its co-founder by authorities

Hong Kong Cryptocurrency Exchange CEO Global announced the arrest of its co-founder by the authorities.

“One of our founders received money from illegal sources from an international fraud group and came under investigation as part of a national operation to combat fraudulent SIM cards and bank accounts,” the exchange writes.. "The founder was detained for 15 days to participate in the investigation.".

The same person turned out to be the holder of private keys from most of the exchange's cold wallets, in connection with which it was forced to stop outgoing operations. In addition, the CEO of Global has banned clients from conducting OTC transactions using its platform, fearing the consequences of the uncertain regulation of cryptocurrencies in China..

China's State Council in October announced the fight against fraudsters using bank accounts and SIM cards to carry out criminal activities. The authorities link the two funds to the rise of telephone and cyber fraud. According to them, fraudsters buy already registered SIM cards and bank accounts in order to avoid disclosing their identities..

The increased demand for such services has led to the formation of a separate criminal industry for the creation and sale of accounts, some of which are registered for stolen data. The State Council said that within two weeks of the operation, police arrested over 4,600 people and confiscated about 65,000 bank cards. More than 15,000 people were banned from opening bank accounts for 5 years.

The explanation of CEO Global is similar to the situation of the OKEx exchange, which, against the background of the involvement of its founder Mingxing Xu in the investigation, could not withdraw the cryptocurrency for more than a month..

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