Another Crypto Exchange Suspends Withdrawals After Founder Detained

Another crypto exchange, CEO Global has suspended accepting deposits and withdrawing funds following the arrest of the main founder, Chinese crypto-journalist Colin Wu said.

December 7, 2020, | AtoZ Markets – Hong Kong cryptocurrency exchange CEO Global has reported that the Chinese authorities have detained one of the founders in connection with a case of fraud with SIM cards and bank accounts.

“As part of the investigation into cases of fraud with SIM-cards and bank accounts, it turned out that one of our founders received funds obtained by criminal means from a group of international fraudsters,” the company noted.

Crypto exchange Global CEO suspends all withdrawals

He was detained for 15 days pending investigation, and the exchange still does not know when the police will release him. As a result, the exchange has suspended accepting deposits and the withdrawal of the cryptocurrency from the exchange, as the founder holds private keys from most of the exchange’s cold wallets.

Global CEO suspended all withdrawals, citing an inability to process all withdrawal requests for digital assets stored in hot wallets.

This situation is similar to the one that OKEx recently faced when the Chinese police suddenly detained one of the owners of the private key. The exchange suspended withdrawals for several weeks and only resumed in the last week of November.

Read also: OKEx Withdrawal Suspension: Market Infrastructure Vulnerabilities Questioned

China tightens the nuts on SIM and bank fraud

Chinese authorities are grappling with the growing number of SIM and bank fraud cases in the country.

Chinese people who do not want to reveal their identity when buying SIM cards or opening bank accounts often choose existing SIM cards or bank accounts opened in the names of other people. Such services are popular in the Chinese crypto community.

The Chinese police reportedly arrested more than 4,600 people and confiscated about 65,000 bank cards in just two weeks after the start of the nationwide crackdown. Moreover, more than 15 thousand people have already received a ban on opening bank accounts for five years.

In addition to suspending withdrawals, CEO Global is shutting down its over-the-counter (OTC) services due to suspicions of further reprisals from the Chinese authorities.

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