Bloomberg has reported that a number of individuals filed police reports after withdrawals were seemingly frozen, and they were unable to access a total of $55,000 of tokens and cash from their Coinsuper account.
Coinsuper was founded in 2017 and is backed by Pantera Capital and run by former UBS China Inc. However, the company’s presence on social media, and transparency overall, has diminished, with unnamed venture capital backers noting that they had “written off” their $1 million investment.
Following a Bloomberg inquiry, a Hong Kong police spokesman revealed they are investigating one case where a Coinsuper investor has been unable to retrieve their funds since December.
Hong Kong currently uses an ‘opt-in’ approach to regulation, where exchanges can apply to be licenced by the Securities and Futures Commission, however this is optional.
Coinsuper’s official Telegram channel is full of messages from users who claim they are unable to withdraw their funds. The Coinsuper team has not made any official statement, nor have they responded to media requests for comments.
Crypto exchanges in Hong Kong have felt the brunt of regulation in recent years, despite the fact that many crypto exchanges, including Crypto.com, BitMEX, Bitfinex started out there. In 2020 the head of the city’s security watchdog said it would propose a licensing regime for all crypto-trading platforms.
Many crypto companies have made the decision to move elsewhere, with neighbouring Singapore receiving a number of exchanges including Coinbase and Binance. The Monetary Authority of Singapore has confirmed that it’s received 170 applications for crypto-related service providers since July 2021, following the opening of its door to “crypto tokens” in 2020.
Cosuper has had a $14 million in trading volume in the past 24 hours, which compared to last its peak of $1.3 billion in 2019 is an indicator of how poorly the company is faring.
Whether Coinsuper will survive this turbulent time remains to be seem, but with employees reportedly resigning, police reports, and VC’s that have “written off” their investment, time may confirm that the exchange is on the brink of collapse.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.