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While OKEx suspends account withdrawals, Huobi assures normal operations

Photo of: Sangeetha Golchha
by Sangeetha Golchha

OKEx’s move to suspend all the cryptocurrency withdrawals for an indefinite time has created an apparent panic in the users. But amid the OKEx situation, the Huobi cryptocurrency exchange has ventured in to ensure and assure its users that the trading platform at Huobi is operating the way it always has been and everything is normal.

The OKEx episode came to light when the world’s biggest cryptocurrency exchanges said that it has stopped all withdrawal when it lost contact with an employee who was co-operating in a Chinese government investigation. The employee was involved in the inquiry launched by the public sector bureau in China. The official also happens to be the holder of the exchange’s private keys which enables the authentication of cryptocurrency transactions. OKEx has not disclosed how many private keys were unavailable and for which cryptocurrencies. 

Ciara Sun, the Vice President of Huobi Global Markets told, 

“Huobi’s cold wallet uses multi-signature and threshold signature technology to ensure the security of the private key signature process. Multiple people and multiple backups ensure the availability of the private key.”

When the BitMex investigation came into the picture, it suffered because there were large withdrawals taking place. Traders were withdrawing their funds and shifting it to a competitor base but in the case of OKEx, this does not seem to be happening with Huobi because there is an increasing concern about Huobi’s operations especially when the two exchanges have a larger user base in China. Speculations were rife that Huobi might have loaned assets to OKEx but as per the data provided by CryptoQuant 997, BTC was transferred from Huobi to Binance at 10:21:30 UTC onn16th October In one of the whale alerts also the transaction was captured but it is said to have gone to OKEx by mistake. 

Source: CryptoQuant

“This was a normal withdrawal behavior. It did not trigger risk control and did not involve illegal operations. We cannot disclose our user information.”

But after all the negative situations, it seems that Huobi has not been affected. Sun said that Huobi has invested a lot of resources in anti-money laundering and fraud prevention. Matthew Graham, chief executive officer of Beijing-based crypto consultancy Sino Capital, said:

“At this time there’s no evidence to support that this could extend to Huobi as well. Our current understanding is that this is an issue that’s specific to OKEx.”

Source: Twitter

Regulators have now taken a tough stance against anything that deviates from what is expected. It was reported that representatives of BTCC, OKEx, and Huobi also met with the officials of the People’s Bank of China and were warned to follow all the laws and regulations closely. 

OKEx and Huobi are headquartered in Malta and Seychelles and people who are akin to whatever is happening they believe that all this brouhaha is the result of the affinity of these exchanges to the Chinese Government. Huobi has a branch in China which is a part of the group that works with the government to build an influential blockchain infrastructure in the country.