Pantera-Backed Crypto Exchange Reportedly Freezing User Funds
Customers report not being able to withdraw money or tokens from Coinsuper since November.
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Coinsuper, a Hong Kong crypto exchange backed by Pantera Capital, has come under fire after customers reported not being able to withdraw their assets since November.
Coinsuper Exchange Stops Withdrawals
Coinsuper customers are unable to withdraw their funds.
According to a Friday investigation by Bloomberg, reports have emerged that the Hong Kong exchange Coinsuper has frozen users’ money and crypto assets.
Five customers have filed police reports after withdrawals were apparently frozen in November, leaving them unable to retrieve approximately $55,000 worth of tokens and cash.
While only five users have reported the situation to the police so far, the actual amount of frozen funds is likely much higher. Throughout 2021, daily trading volumes on Coinsuper consistently remained above $20 million. However, in October, volumes started to wane, dropping to a low of $2.59 million, according to crypto data site Nomics.
Regulation surrounding crypto exchanges in Hong Kong follows an “opt-in” model, meaning that it is not mandatory. According to ONC Lawyers consultant Joshua Chu, many exchanges see complying with the opt-in system as too stringent and restrictive, meaning few undergo the proper checks and balances.
U.S asset management firm Pantera Capital was one of Coinsupers’ earliest investors, contributing to the exchange’s 2018 Series A funding round for an undisclosed amount. Despite the recent controversy, Pantera Capital still lists Coinsuper among its investments on its website.
Coinsuper’s asset freeze highlights the danger of leaving money and tokens on centralized exchanges. AscendEX, a Singapore-based crypto exchange, recently lost an estimated $77.7 million to hackers, according to blockchain security firm PeckShield. Although AscendEX has assured customers that it will compensate them for any lost tokens, the hack will likely interfere with users’ ability to withdraw funds.
Crypto Briefing reached out to Coinsuper and Pantera Capital for comment, but did not receive a reply at press time.