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Cryptocurrency exchange OKEx has suspended withdrawals. One of the private key holders does not get in touch, at the time of writing he is cooperating with law enforcement agencies.
Withdrawals of digital assets/cryptocurrencies @OKEx are currently suspended. Other functions are up and running. Your funds and assets are safe and not affected. Details: https://t.co/vMehdsZs1b
We sincerely apologize for any inconvenience. Further announcements will be made. pic.twitter.com/t14l7z0EUL
— OKEx (@OKEx) October 16, 2020
The rest of the functions work, and the digital assets of users are safe, according to representatives of the site.
OKEx CEO Jay Hao stressed that the investigation concerns the personal issues of the key holder and is not related to the exchange. Dovey Wan of Primitive Ventures clarifiedthat we are talking about the Chinese law enforcement agencies.
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
Update: Authoritative publication Caixin reported that OKEx and OKCoin founder Star Xu [Star Xu/Mingxing Xu] detained… In a literal translation, the resource wrote that he was “taken away.” In September 2018, his briefly arrested as part of one of the investigations related to cryptocurrency fraud.
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, for which they have questions. We expect that after talking with Xu with the police, the withdrawal will be restored. “
At the same time, it remains unclear how exactly ending the conversation between Xu and the police will restore the withdrawal of funds if Xu is not the holder of the private key.
A few hours before the application with OKEx, significant amounts were withdrawn BTC, TRON and ETH.
Red Lee, co-founder of 8btc, said that rumors of money laundering through 800 accounts on a particular exchange are spreading on the network, 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
Users have already noticed the security rules for OKEx private keys, which involve backups and copies in the hands of different people in different locations. A version is spreading on Twitter that law enforcement agencies have ordered to stop the withdrawal of funds.
so yeah… pic.twitter.com/vLZesmxYLg
— i.am.nomad (@IamNomad) October 16, 2020
goes with this https://t.co/zj5Zfsubyj
— i.am.nomad (@IamNomad) October 16, 2020
Bitcoin and OKB exchange token quotes immediately reacted to the news with a fall.
According to Glassnode, OKEx wallets hold almost 202,000 BTC (1.1% of the Bitcoin market supply).
We will remind, earlier the US Department of Justice accused the founders of the BitMEX exchange of violating the Bank Secrecy Law. They face up to five years in prison.
In parallel, the Futures Trading Commission filed a lawsuit against them and the parent company 100x Holdings Limited for violating the rules in terms of conducting KYC / AML and managing an unregistered trading floor.
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