The former CEO of AAX, Weigao Capital Liang Haoming, and the founder of AAX, Thor Chan, were arrested on Dec. 23. Local authorities accused the company's head of declaring "system maintenance" as an excuse to delay customers from withdrawing assets amid liquidity issues.

One of the executives also lied to the police about the timeline of his activities in the company, deliberately misleading enforcement authorities, the police investigation revealed.

Two bank accounts of AAX as well as the executive's bank accounts and properties have been frozen. A third executive who fled overseas with an AAX wallet and private keys that police believe contain around $30 million in digital assets. His properties in Hong Kong were seized by the police as well. As part of the investigation, Hong Kong authorities are working closely with overseas investigators to trace the funds.