AAX unlikely to reopen

Cryptocurrency exchange AAX is unlikely to reopen as talks become mired in NDAs and staff departures.

Hong Kong based cryptocurrency exchange Atom Asset Exchange (AAX) will not be able to reopen, the company’s now former VP and head of research Ben Caselin has confirmed.

AAX was caught by surprise when Sam Bankman-Fried’s cryptocurrency exchange FTX collapsed.

AAX has already lost “most of its staff”, due to voluntary resignations, according to Caselin. AAX froze assets on its platform on November 13 in an attempt to contain the domino effect from FTX’s fall.

The development offers an interesting look at how the cryptocurrency industry is connected. On the day of FTX’s collapse, AAX hurried to confirm that it had no exposure to the competitor, nor any of its connected entities. All AAX funds, the company said, were guaranteed and safely secured in cold wallets.

However, Caselin is not entirely sure if this is the case as he told Forkast News that communication from higher-ups had become “messy and opaque”, indicating that there may be a serious issue at hand.

Caselin himself confirmed that he was aware of severe problems within AAX that needed addressing but were not discussed at the behest of higher-ups.

On November 13, AAX suspended withdrawals and froze all activities to respond to what the company described as a series of malicious attacks.

It became clear soon after that AAX needed more capital, which triggered internal discussions about issuing debt, selling equity or considering a merger or acquisition, much like FTX had hoped to be bought out by competitor Binance, which recently setup a rescue fund for troubled cryptocurrency companies.

It was at this point that the company started seeing staff leave. Many were asked to sign non-disclosure agreements (NDAs) but refused and left voluntarily, while others were terminated behind the scenes. Caselin told the publication this amounted to almost half the staff.

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Written by Alex

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Alex is a well-rounded crypto writer who focuses on general market and legal developments. His main interest lies in how crypto gaming can become a more permanent part of the gaming landscape and how blockchain holds benefits to players they are not even aware of.

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