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OKEx freezes withdrawals – What’s next?

Photo of: Joseph Stone
by Joseph Stone

OKEx, one of the world’s leading cryptocurrencies exchanges, said it had to suspend withdrawals of crypto-actives because one of its private key holders “is currently cooperating with a public security bureau in an investigation” and the company has no further contact with him.

“We will resume withdrawals of encrypted digital assets/currency as soon as the private key holder is able to authorize transactions,” said OKEx.

“The decision to temporarily suspend withdrawals has been made in order to maintain our high security standards. All funds are secure and all other features are available on the platform. We aim to restore full service as soon as possible,” the exchange told journalists.

However, at this stage, they “cannot provide a precise timetable” for resuming withdrawals. In addition, the company stated that it has contingency plans in case a private key holder is unavailable “for an extended period of time”. OKEx declined to provide further details on these plans.

On Friday, October 16, Jay Hao, CEO of OKEx, also tweeted that all other operations on OKEx “were unaffected” and that “all your funds and assets were safe”.

“The investigation only concerns the personal problem of a certain private key holder,” said the CEO.

The founder of OKEx, Star Xu (real name Xu Mingxing) was taken for questioning by the police a week ago, the media outlet Caixin reported in an article, citing two undisclosed sources.

OKEx refused to comment on the article, stating that it “is not in a position to reveal information that could endanger the funds of our users”.

Star Xu had some kind of contact with the Chinese police as early as 2018. According to conflicting reports at the time, Xu was detained for a full 24 hours at the police, while others claimed that Star Xu’s arrest was “false news” and “that Xu, in fact, was seeking police assistance”.

In response to allegations that the company was “continually” changing the time of the suspension of withdrawals, the exchange stated that “the suspension of withdrawals was not a decision taken lightly”.

“We recognize that this greatly affects the user experience. That’s why the decision was ultimately made as a last resort,” they added.

The Bitcoin Balance (BTC) on OKEx stands at 276,185 ($3.14 billion USD) and is the fourth most significant among exchanges, according to chain.info data. It has decreased by more than 2% in the last 24 hours, while the other exchanges have experienced smaller variations, with the exception of Bitstamp (+6.9%).