Cryptocurrency exchange OKEx has suspended withdrawals. One of the private key holders does not get in touch, at the moment he is cooperating with law enforcement agencies.
We sincerely apologize for any inconvenience. Further announcements will be made. pic.twitter.com/t14l7z0EUL
— OKEx (@OKEx) October 16, 2020
According to platform representatives, the rest of the services are still functioning, the users’ assets are safe.
OKEx CEO Jay Hao stressed that the investigation concerns the personal issues of the key holder and is not related to the exchange. Dovi Wang of Primitive Ventures clarified that it is about the Chinese security forces.
All operations @OKEx except digital asset/cryptocurrency withdrawals remain unaffected.
All your funds and assets are safe.
The investigation concerns a certain private key holder’s personal issue only. Further announcements will be made.
— Jay_OKEX_CEO (@JayHao8) October 16, 2020
Authoritative publication Caixin reported that OKEx and OKCoin founder Star Xu / Mingxing Xu was detained a week ago. In a literal translation, the resource wrote that he was “taken away.” In September 2018, he was arrested as part of one of the investigations related to cryptocurrency fraud, but shortly after released.
In a comment to ForkLog, OKEx said Star Xu is in the Beijing office.
“He is not a key holder and cannot verify transactions. The police asked him to comment on the situation with the key holder, which they have questions for. We expect the withdrawal to be reinstated after Xu talks with the police. ”
At the same time, it remains unclear exactly how the conversation between Xu and the police will allow the withdrawal of funds to be restored if Xu is not the holder of the private key.
OKEx later stressed that Xu was not involved in the company’s operations.
According to the Chinese media, two more top managers were detained along with Star Xu. However, as reported, they have already been released on bail. The story alleges that Xu’s detention is related to OK Group’s reverse listing on the Hong Kong stock exchange and not to OKEx’s operations. This information contradicts Caixin’s data. It is not yet known whether the detainees were officials at OKCoin or OKEx.
A few hours before the news with OKEx, significant amounts of BTC, TRON, and ETH were withdrawn. According to Glassnode, about 200,000 BTC (1.1% of the market supply) are stored on the exchange.
— glassnode (@glassnode) October 16, 2020
Red Li, the co-founder of 8btc, said that rumors of money laundering through 800 accounts on a particular exchange are spreading on the internet, hinting at the possible cause of the problem.
#okex first stated withdrawal will be suspended 15PM but quickly changed to 11AM. Rumor has it that over 800 accs in “certain” exchange are involved with cross-border money laundering. #btc #crypto pic.twitter.com/mc67ZRCj6O
— Red Li (@redtheminer) October 16, 2020