Malta-based cryptocurrency exchange seems to be turning to peer-to-peer (P2P) trading amidst the indefinite suspension of crypto withdrawals on the platform. According to an announcement on October 20, the platform is resuming p2P and fiat-to-crypto trading for Chinese yuan, Vietnamese dong, and Indian rupee starting from 20:00 Hong Kong Time on October 21.
As reported earlier, the platform suspended withdrawals on its platform citing that one of the exchange’s key holders has been “out of touch”, hence, all “associated authorization” for withdrawals had been prevented.
The key-holder was “cooperating with a public security bureau” concerning ongoing “investigations,” which it said didn’t have anything to do with OKEx.
With the P2P system, OKEx basically functions like an escrow that facilitates fiat-to-crypto trading in a manner similar to over-the-counter trades. Third-party merchants can bid or ask prices for a certain cryptocurrency asset against a supported fiat pair like the Indian rupee.
The buyer needs to wire the fiat money to the OTC merchant via supported payment methods like bank transfers or via other payment providers. When the Merchant confirms that the payment has been received, OKEx credits the newly-purchased crypto to the buyer’s account as an internal transfer that doesn’t require on-chain transactions.
Users can also transfer assets directly via off-chain internal transfers as long as they have each other’s unique ID on the exchange.
Even though it is a lengthy process, this has been the only fiat on-ramp and off-ramp for Chinese crypto traders since September 2017 and even for Indian crypto traders until the Supreme Court lifted the ban on crypto trading earlier this year.
OKEx customers run their own shop
Despite the availability of this system, some OKEx users have worked out alternatives to get their funds out of the platform for as long as withdrawals are suspended. As there is no direct interface for P2P bids and asks, users have also taken their quotes outside of the exchange, to other communication channels.
As a result of the indefinite nature of the suspension, OKEx customers have also been posting on social media that crypto assets on OKEx such as USDT and BTC are being sold at a 10% – 20% discount in the P2P fashion.
This has resulted in OKEx banning some user accounts. In a tweet the platform said:
“Multiple accounts have triggered our risk management system. As a result, those accounts have been automatically banned for internal transfers. To ensure the safety of your assets, we’d like to remind users not to engage in unauthorized platforms.”