The little known crypto group that pulled in $33 billion last year

A little known cryptocurrency trading house that appears to have most of its operations in Hong Kong and Singapore has emerged as the sixth-largest operation by income in Australia for the 2022 tax year.

WX Trading – which appears to be affiliated with WX Capital, a large cryptocurrency trading site – reported $33 billion in income for the year, ranking it between supermarket giant Coles and Perth-headquartered conglomerate Wesfarmers in terms of total annual income.

According to the ATO data, WX Trading’s taxable income was only $5.9 million, and it paid $1,774,084 in income tax during the year.

The company counts three Millennials – Dongtao Yu, Zhang Li and Wiuxaun Lui, all born between 1993 and 1995 – from Melbourne and Canberra as its directors. Lui and Yu are also both directors of another Australian-registered company, WX Capital, which was set up in 2021.

WX Capital is tied to a cryptocurrency trading firm operated out of Hong Kong and Singapore that bears the same name.

Both WX Trading and WX Capital list their principal place of business as an office suite inside a tired-looking office building on Northbourne Avenue in Canberra suburb of Turner. The same suite inside the Northborne office also holds Canberra property development companies tied to the Yu family – Coda Property Group and TLF Taofei.

The Yu family has strong ties to Australia and recently sold their large home in the Melbourne blue ribbon suburb of Brighton for $9.2 million, according to property records. Dongtao Yu listed the Brighton home as his home address on company records. The family also lists a Kenneth Oliphant designed house in Forrest, Canberra, as their home address. The Age and Sydney Morning Herald were unable to contact the directors of WX Trading, either directly or through family businesses.

The large gap between WX Trading’s income and its taxable income might be explained by the company’s business.

The WX Capital website explains that its Hong Kong and Singapore entity were formed to increase liquidity among cryptocurrencies and digital assets across all major cryptocurrency exchanges. This process acts almost like a clearing house and ensures each exchange can match the trades by its customers and meet withdrawal requests. WX Capital also owns the business name DFX Australia, a foreign exchange trading house that sells legal high risk financial betting products known as contracts for difference.

“As a dedicated cryptocurrency trading firm, we leverage our extensive background in traditional trading and emerging financial markets to drive demand and liquidity of digital assets across all major exchanges,” the website says.

“Our team is passionate about utilising cutting-edge technology and innovation in our self-developed high frequency trading strategies, combined with intense quantitative analysis of market conditions and trends.”

Both Hong Kong and Singapore have in recent years stepped up their regulation of cryptocurrencies. This compares to Australia which is yet to regulate cryptocurrency like other financial products.

Content retrieved from: https://www.smh.com.au/business/markets/the-little-known-crypto-group-that-pulled-in-33-billion-last-year-20221103-p5bvdh.html.