Another Asian Crypto Exchange Suspends Withdrawals as China Detains One of Its Founders – News Bitcoin News


Another Asian Crypto Exchange Suspends Withdrawals as China Detains One of Its Founders

Chinese authorities are launching a national crackdown against fraudulent SIM card and bank account schemes. The latest detained under this operation is one of the founders of a Hong Kong-based cryptocurrency exchange CEO Global (ceobi).

Crypto Exchange Founder Taken Into Custody by Chinese Police Amid Nationwide Crackdown

According to an announcement published by CEO Global, one of its founders had been taken under custody by China’s authorities in the midst of an ongoing investigation that involves alleged participation in a fraudulent bank account and SIM card scheme. The statement says:

Affected by the ongoing national crackdown on fraudulent SIM cards and bank accounts, the bank account of one of our core founders has received illicit money from international fraudsters and scammers.

The unnamed founder has been taken away for 15 days to pursue the investigation, the exchange said. However, they don’t have any clue on when the police will release him.

But CEO Global did not make this public by chance, as the exchange noted the founder holds the private keys to most of the platform’s cold wallets, forcing them to halt all the withdrawal requests upon further notice.

They cited its inability to process all the withdrawals from the crypto held in the hot wallets. This situation also forced Hong Kong-based crypto exchange to close all its over-the-counter (OTC) trading services, citing “uncertainties” surrounding Chinese authorities’ future crackdown.

A similar situation happened with the crypto exchange Okex, which disabled withdrawals on October 16, 2020, following the detainment of its founder, Mingxing “Star” Xu. However, as of press time, Okex’s withdrawals have been running since it was re-enabled on November 26, 2020.

Fraudulent SIM Cards, Bank Accounts Schemes Popular Among Crypto Scammers

Rising SIM cards and bank account scams cases in China have been raising concerns among authorities.

Locals who are unwilling to disclose their identities when acquiring a new SIM card or opening a new bank account opt for existing ones owned by other people, often leading to strengthening an industry that trades with accounts obtained via identity theft.

Such maneuverer has led to fraudsters seeking such services to pursue crypto-related scams. According to the latest figures, the Chinese police have arrested over 4,600 people and confiscated about 65,000 bank cards in two weeks since the start of the nationwide crackdown.

Tags in this story
China, China crackdown, Chinese Police, crypto exchange, Founders, Hong Kong, OTC, pausing withdrawals, Withdrawals

Do you think this crackdown could further hurt the reputation of the crypto industry within the Chinese government? Let us know in the comments section below.

Felipe Erazo

Born in Colombia, Felipe earned a degree in journalism at the University of Chile with the highest honor in the overall ranking and holds a Bachelor of Arts in Social Communication. He is a writer with more than nine years of experience, first in the Forex field and later in the crypto industry as an analyst/news junkie. Among his interest topics include human rights, decentralization, financial markets, geopolitics, sports, and new technologies. An inveterate traveler, and always attracted to a good plate of food.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read disclaimer
Show comments