Over the past months, multiple centralized crypto exchanges have been targeted by the regulators for involvement in illicit activities. The crypto community is now speculating that popular crypto exchange OKEx is next on the list.
Earlier in the day on October 16, OKEx suspended all cryptocurrency withdrawals. The exchange published a notice stating that one of the exchange’s key holders has been “out of touch”, hence, all “associated authorization” for withdrawals had been prevented.
The exchange added that its key-holder was “cooperating with a public security bureau” concerning ongoing “investigations,” which it said didn’t have anything to do with OKEx.
OKEx CEO Jay Hao noted that the decision to temporarily suspend withdrawals was taken “with user security in mind,” stating:
“As a world-leading exchange, user security is not something that OKEx can or will ever compromise on. We will do everything in our power to reinstate this service promptly and will provide updates on the matter as soon as possible.”
Could OKEx be involved in illicit activities?
Later in the day, Chinese news agency Caixin reported that OKEx founder Mingxing Xu, also known as Star Xu, has been investigated by the Chinese Police “at least a week ago” and has been absent from work as well.
When OKEx was requested for comment on the matter, the exchange informed crypto media outlet Cointelegraph that the OKEx was has cut ties with OK Group, where Xu was senior executive, and hence they were unable to make any comment regarding his activities.
Funds move in despite withdrawal suspension
Meanwhile, on-chain crypto service whale alert notified that despite the suspension of withdrawals, which resulted in mass panic and many traders cashing out, a total of 1,995 BTC worth $22.5 million was transferred from Huobi to OKEx shortly after withdrawals were suspended.
The massive transfer has sparked some wild speculations especially because the funds will now be locked in the platform for as long as the suspension isn’t lifted. Some crypto enthusiasts believe this could be a delayed BTC transaction.
On top of this, OKEx had also seen 1180 BTC worth $13.6 million, 50 million TRX worth $1.3 million, and 21,000 Ether (ETH) were made as outgoing transfers over a span of six hours before the announcement of the withdrawal. An incoming transaction of approximately $13.9 million in USDT was also noted.
While this could all turn out to be nothing, the present scenario isn’t quite the ideal one to remain optimistic about crypto exchanges.
Following the announcement, Beijing-based reporter Colin Wu had suggested that the OKEx investigation could be a part of the larger crackdown by the Chinese government regarding money laundering.
According to Chain.info, OKEx currently holds a total of 276,184 BTC on all its wallets combined. A total of 6,269 BTC left OKEx over the past 24 hours.