Site iconSite icon ForkLog

OKEx suspends withdrawals; media report founder detained

ForkLog
OKEx suspends withdrawals; media report founder detained

The cryptocurrency exchange OKEx has suspended withdrawals. One of the private-key holders is not responding, and at the time of writing he is cooperating with law enforcement authorities.

The rest of the platform’s functions remain online, and users’ digital assets are safe, according to OKEx representatives.

OKEx CEO Jay Hao stressed that the investigation concerns the private matters of the key-holder and is not connected with the exchange. Dovey Wan of Primitive Ventures clarified that this relates to Chinese authorities.

Update: The authoritative Caixin reported that OKEx and OKCoin founder Star Xu (Star Xu/Mingxing Xu) was detained a week ago. In a literal translation, the outlet wrote that he was “taken away.” In September 2018 he was briefly arrested in connection with one of the investigations related to cryptocurrency fraud.

In a conversation with ForkLog, an OKEx spokesperson said that Star Xu is at the Beijing office.

“He is not a key holder and cannot verify transactions. The police asked him to give a comment on the situation with the key holder whom they have questions about. We expect that after Xu’s discussion with the police withdrawals will be restored.”

It remains unclear how exactly the conclusion of Xu’s talk with the police would restore withdrawals if Xu is not the private-key holder.

OKEx later emphasised that Xu does not participate in the company’s operational activities.

Update: According to Chinese media, two other top managers were detained along with Star Xu. As reported, they have been released on bail. The article claims that Xu’s detention is connected to the reverse listing of OK Group on the Hong Kong stock exchange (read more via the link), and not to OKEx’s activities. This information contradicts Caixin. It is not yet known whether the detained were executives at OKCoin or OKEx.

Update: After the suspension, an unknown Huobi user transferred 1,995 BTC to OKEx. Whale Alert logged transfers at 10:51 and 13:22 MSK.

Update: In the last 48 hours prior to the suspension, 10,000 BTC were moved out of OKEx. The outflow was recorded by Glassnode. However CryptoQuant contends that these are internal transfers.

Update: OKEx told CoinDesk that the investigation is not connected with the exchange or AML procedures. This refutes rumours that the situation relates to money laundering via the platform, which had earlier been spread by 8btc co-founder Red Li.

Update: At 17:28 MSK, Whale Alert logged withdrawals from OKEx to Binance in two transactions: 5,000 BTC and 3,500 BTC. The channel administrator suggested these may be internal transfers within OKEx.

OKEx denies that the addresses belong to them.

Update: At the end of the day, OKEx again stressed that funds are safe, but withdrawals have not been opened.

Update: The community manager at OKEx, Anton Ananyev, told RBC-Crypto that ForkLog’s comment attributed to another employee of the exchange was “a fabrication.” We immediately provided colleagues with evidence that the comment was supplied to us by a real OKEx representative.

OKEx spokeswoman Vivienne Chow later said that neither Ananyev nor the person ForkLog spoke with were authorised to provide official comments.

We thank RBC-Crypto colleagues for promptly reacting to the defamatory statements by OKEx manager Anton Ananyev and updating their piece accordingly.

Hours before the statement from OKEx, substantial sums moved in BTC, TRON and ETH. According to Glassnode, around 200,000 BTC (1.1% of the circulating #bitcoin supply) are currently held in OKEx wallets.

Red Li, co-founder of 8btc, said that rumours were circulating about money laundering through 800 accounts on an unnamed exchange, hinting at a possible reason for the event.

Users have already pointed to OKEx’s private-key safety practices, including backups held by different people in different locations. On Twitter there is talk that law enforcement ordered withdrawals to be halted.

Bitcoin prices and the exchange’s OKB token fell immediately following the news.

Recall that the U.S. Department of Justice had previously charged the BitMEX founders with violations of the Bank Secrecy Act. They face up to five years in prison.

CFTC filed suit against BitMEX and its founders

Separately, the U.S. Commodity Futures Trading Commission filed a suit against them and the parent company 100x Holdings Limited for violations of KYC/AML rules and for operating an unregistered trading venue.

Follow ForkLog on Telegram: ForkLog Feed — all the news, ForkLog — the most important updates and polls.

Exit mobile version