Hong Kong digital currency exchange Coinsuper allegedly hit by frozen funds
- Customers say they cannot withdraw money or tokens from the bourse, and at least seven have reported the matter to police
- The uproar around Coinsuper, backed by Pantera Capital, may fuel calls for broader regulatory oversight in Hong Kong
Dozens of clients have been unable to make withdrawals from Coinsuper since late November, based on a review of messages on the firm’s official Telegram chat. Five customers told Bloomberg News that they had filed police reports after withdrawals were apparently frozen, leaving them unable to retrieve about a combined US$55,000 of tokens and cash.
Coinsuper executives did not respond to calls and messages seeking comment. In response to a Bloomberg inquiry about the Coinsuper complaints, a Hong Kong police spokesperson said by email that it is investigating one case where a person who bought cryptocurrency “via an investment company” had been unable to withdraw her funds since December.
In Coinsuper’s Telegram chat, the administrator stopped responding to queries about failed withdrawals in late November, then resurfaced in the past week to ask affected users to provide their email addresses. Some clients said in interviews that there was no follow-up after doing so, and the administrator did not respond to messages from Bloomberg.
Terry Chan, who works in the city’s financial industry, started using the platform in November 2020 because it was “quite large in Hong Kong” at the time. He tried to withdraw US$4,000 from the exchange in early December after noticing that trading there was becoming less liquid. On January 5, he filed a group complaint to Hong Kong police together with two other affected Coinsuper clients.
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Coinsuper’s trading app remains operational, and the exchange handled around US$18.5 million of volume on Friday – down from a daily peak of US$1.3 billion in late 2019, according to cryptocurrency data firm Nomics. Binance, the biggest cryptocurrency exchange, handled about US$51 billion of transactions over the same time period, Nomics data show.