Experts Report Withdrawal of 24,000 ETH from Bankrupt AAX Exchange

Analysts at Cyvers Alerts have detected suspicious transactions, allegedly involving the laundering of 24,000 ETH (~$69.6 million) from the defunct bitcoin exchange AAX.

?INVESTIGATION? ?Our system has detected suspicious transactions involving @AAXExchange.
It’s a Hong Kong-registered exchange where CEO Thor Chan resigned in May ’21.
Just two days after @FTX_Official filed for bankruptcy, #AAX halted all withdrawals on Nov 13 ’22, wiping its…

— ? Cyvers Alerts ? (@CyversAlerts) February 20, 2024

In November 2022, immediately following the collapse of FTX, the platform suspended withdrawals, citing planned technical maintenance. The team assured that the restriction on operations was not related to the collapse of Sam Bankman-Fried’s business empire.

On November 21, the exchange announced the automatic closure of users’ futures positions due to ongoing maintenance. This turned out to be the company’s last activity on social media.

By the end of the month, media reported that the exchange was on the brink of closure. On December 16, the website and app of the Hong Kong-based AAX ceased operations.

Cyvers Alerts specialists noted the withdrawal of 24,000 ETH from a wallet allegedly belonging to the exchange at the end of January 2024.

Subsequently, part of the sum was split across several addresses, converted into wrapped tokens WETH, then into stablecoins USDT, and back into ETH. Assets worth about $20 million were then sent to the Tron network. The operations involved DeFi protocols UmbraCash and 1inch, as well as the cross-chain service SwftCoin.

Experts believe that the “observed patterns” in the transactions indicate attempts to circumvent anti-money laundering measures.

Analysts noted that part of the funds was blacklisted by Tether, the issuer of USDT. The remaining sum ended up on centralized exchanges Bybit and MEXC.

Cyvers Alerts called on renowned on-chain experts Officer’s Notes and ZachXBT, as well as Taylor Monahan from MetaMask, to join the investigation.

Address already bridged the $20M to $TRON using @SwftCoin and still holds $30.5M

Feel free to contribute @officer_cia, @zachxbt @tayvano_ !#CyversAlert

— ? Cyvers Alerts ? (@CyversAlerts) February 20, 2024

Back in December 2022, disgruntled AAX clients in Nigeria stormed the local office of the exchange, demanding their money back and assaulting employees.