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AAX Executives Disappear as Suspension of Crypto Withdrawals Spark Panic in Nigeria

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The Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) has appealed against the assault of AAX staff by angry Nigerians, following the suspension of Crypto withdrawals by the exchange, on November 12, which is sparking panic among Nigerian crypto investors exposed to the exchange.

“We appeal to and discourage any dissatisfied or angry user or investor from harassing or victimizing the AAX Country Manager (Nigeria), other local staff members, and AAX ambassadors nationwide. These persons are also facing the same situation as disgruntled users and investors are. At the time of writing this notice, we are aware that communication between these persons and AAX headquarters has been equally strained at this time. We therefore appeal for understanding and patience from all Nigerian AAX users,” SIBAN said in its statement.

Crypto exchange AAX which stands for Atom Asset Exchange, said on Nov 12 that it had suspended activity, citing a scheduled upgrade that had been delayed by turbulent markets.

“Withdrawals have been suspended to avoid fraud and exploitation,” the company said. “AAX will continue our best efforts to resume regular operations for all users within 7-10 days to ensure the utmost accuracy.”

The company, which launched in 2019 as the first crypto user of the London Stock Exchange Group’s (LSEG) matching technology, said it had no financial exposure to FTX or its affiliates.

It stores a “substantial amount” of its assets in cold wallets and doesn’t lend out user funds to venture activities, it said.

However Cryptocurrency investors in AAX are searching for senior executives of the exchange in Hong Kong after its decision last month to halt withdrawals triggered a backlash among users, the FT reported today.

The search, conducted by thousands of users through multiple Telegram messaging groups, underscores the increasing desperation of investors in the unregulated industry.

According to AAX users, the exchange has since failed to process customer withdrawals, and staff told the Financial Times they had been disconnected from the company’s email systems.

The Hong Kong Monetary Authority, the city’s financial regulator, said the exchange did not fall under its purview, while the Securities and Futures Commission said it did not comment on individual cases. AAX is not one of the SFC’s few licensed virtual asset trading platforms.

Hong Kong is a crypto hub, housing offices of several groups, including Sam Bankman-Fried’s FTX exchange and his crypto trading company Alameda.

AAX vice-president Ben Caselin said on Twitter he resigned on November 28, citing a loss of trust in management. Caselin, one of the AAX executives users are searching for to recover their funds, told the FT he was unable to help.

After withdrawals were paused, AAX users set up Telegram groups to exchange information and posted leaked pictures of senior executives’ personal identity documents to try and establish their whereabouts.

“I started to notice there was something suspicious behind all this, so I did my own investigation,” said Mike Ong, a Singaporean financial executive who is part of the groups.

“In that period when they said they were doing maintenance, a lot of core management started to delete their online presence.”

SIBAN says AAX was registered in Nigeria as a corporate member of SiBAN (Global Digital Asset Exchange category) in April 2022 as AAX Atom Asset Exchange, a private company limited by shares, with address at Trident Chambers, PO 1388, Victoria, Mahe, Seychelles.

It has been over 10 days since the system upgrade announced by AAX on 12 November 2022.

“This has understandably caused serious suspicions, panic, and distrust amongst AAX users, particularly Nigerian users, the industry at large, and the general members of the public,” SIBAN said in its statement.

“Consequently, for many AAX users and the members of the public, the prolonged AAX
system upgrade till the time of writing this notice significantly raises more questions
than answers. And AAX, contrary to its promise to maintain a daily update of the
situation, has so far neglected or failed to maintain the trust and confidence of its
users.”

Read FULL SIBAN Letter Here.

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