In a surprising turn of events, popular cryptocurrency exchange OKEx has suspended all cryptocurrency withdrawals, citing that it can’t get in contact with one of its key holders. This has caused widespread panic within the crypto community that has seen multiple exit scams over the last few years. As a result, the market took a hit and most of the top cryptocurrencies sold off on the news.
According to a notice published by the exchange on October 16, one of the exchange’s key holders has been “out of touch”, hence, all “associated authorization” for withdrawals were barred from completion.
The exchange has noted that its key-holder is “currently cooperating with a public security bureau” concerning ongoing “investigations.”Citing the terms and conditions of service, the exchange decided to suspend withdrawals until the key-holder is back in contact.
The notice reads:
“OKEx’s other functions remain normal and stable and the security of your assets at OKEx will not affected. We will resume digital assets/cryptocurrencies withdrawals immediately once the concerned private key holder is able to authorize the transaction.”
CEO of the company Jay Hao has noted that the key-holder is cooperating with the officials because of a “personal issue” that would not affect the exchange in any way. Hao also announced on twitter that all non-crypto or digital asset operations were unaffected.
As soon as reports of this event surfaced, the price of Bitcoin fell nearly 3% and the exchanges native token OKB dropped 15% as the community panicked over the news.
More than what meets the eye?
It is interesting to note that multiple large transfers between OKEx and unknown wallets were flagged by on-chain transaction monitoring service Whale Alert hours before the announcement.
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. An incoming transaction of approximately $13.9 million in USDT was also noted.
According to whale alert’s feed, these transactions occurred during a similar time period to what was observed during transfers of coins from the Bitfinex hack. However, this could be coincidence as the exchange sees several large transactions every day.
Meanwhile, Beijing-based reporter Colin Wu suggests that the OKEx investigation could be a part of the larger crackdown by the Chinese government regarding money laundering.
“The Chinese government is cracking down on money laundering using cryptocurrency for telecom fraud, and centralized exchanges are in a very dangerous state.”
The information remains unverified at this time.