The annual black swan in the currency circle? OKEx Suspends Withdrawal Suddenly

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Author: Lou Yue

As one of the three domestically recognized exchanges, OKEx announced in an announcement issued at around 11:54 on October 16th, Beijing time, that it will suspend the withdrawal of coins , and added that some private key persons are cooperating with public security investigations. Being in a disconnected state, the authorization cannot be completed .

Full text of the announcement

Recently, some of the private key persons in charge of our company are cooperating with the investigation by the public security organs, and they are currently in a state of disconnection and the authorization cannot be completed. According to the “Service Changes and Discontinuance” clause 8.1 of the “Terms of Service”, OKEx may change the service content and/or interrupt, suspend or terminate the service at any time or without prior notice. In order to maximize the interests of customers and serve customers for the longest time, starting at 11:00 on October 16, 2020, OKEx has decided to suspend user withdrawals. We assure you that other functions of OKEx are normal and your asset security will not be affected.

We apologize for the inconvenience caused to you by the suspension of withdrawals, and will release the latest information in a timely, accurate and transparent manner. When the person in charge of the private key can complete the authorization, OKEx will resume the withdrawal function as soon as possible. I hope you will continue to support and trust OKEx, and we will continue to provide customers with first-class products, services and technical support.

It is worth noting that OKEx initially announced that it would suspend the user’s withdrawal function from 15:00 , but quickly revised the announcement to 12 o’clock, and subsequently stated that the withdrawal was suspended at 11 o’clock .

Market Reaction

After the announcement, the OKEx platform currency OKB plummeted by more than 15% within ten minutes, and the short-term minimum touched 4.80USDT.

Since the announcement, the cryptocurrency market has generally declined . Bitcoin fell nearly 3% within ten minutes, and fell below 11,200 USDT in a short-term, reaching a minimum of 11,180.8 USDT, a new low in the week. The Huobi platform currency HT also fell back. After 10 minutes of the announcement, it fell by more than 5%, and the short-term minimum touched 4.2888USDT.

The annual black swan in the currency circle? OKEx Suspends Withdrawal Suddenly

Under market volatility, the contract market’s liquidation volume in the last 1 hour reached 88.75 million U.S. dollars, and the 24-hour liquidation volume reached 148 million U.S. dollars. The two largest liquidations in the last 24 hours came from the OKEx BTC perpetual contract.

The annual black swan in the currency circle? OKEx Suspends Withdrawal Suddenly

A “huge shock” in the domestic currency circle

OKEx was established in May 2017. It is a digital asset trading platform that provides spot and derivative trading services of Bitcoin, Ethereum and various innovative digital assets to users around the world. However, most users on the OKEx platform are domestic users. , Is also known as one of the three major domestic exchanges , so the suspension of currency withdrawals caused an uproar in the domestic crypto industry .

Many domestic cryptocurrency users treat exchange wallet accounts as their usual ” coin hoarding accounts ” to facilitate trading operations. This announcement happened suddenly and many users’ digital currencies may be directly “locked” in the exchange. , OKEx’s suspension of withdrawals may have a direct impact on some speculators.

OKEx’s own ecology also involves public chains, wallets, mining pools and other fields. OKEx was formerly known as the established exchange OKCoin, known as the “Currency Circle Whampoa Military Academy”, and was one of the earliest exchanges in China involved in derivatives trading .

Although some users have always complained about the phenomenon of “pin insertion” in OKEX contracts in some special market conditions, so far, OKEx has not seen any major security incidents such as hacking or coin loss, so it is also a choice for domestic users to compare One of many contract exchanges.

According to data from the cryptocurrency data website GoinGecko, OKEx’s 24-hour derivatives holdings ranked first, and trading volume ranked second.
The annual black swan in the currency circle? OKEx Suspends Withdrawal Suddenly

OKEx CEO Jay Hao responded

OKEx CEO Jay Hao said in response to “Suspend the withdrawal of coins” on Weibo, “Please rest assured that the company, business, and platform operations will not be affected . It is a personal issue of the private key manager . We will temporarily stop withdrawing coins. We will make arrangements for the first time. Announce to everyone, please refer to the announcement information.”

The annual black swan in the currency circle? OKEx Suspends Withdrawal Suddenly

After the release of this Weibo, OKB rebounded slightly in the short term.

“Guess boldly”

Private key management issues

From OKEx CEO Jay Hao’s response, it can be seen that the greatest possibility is the personal issue of the private key manager .

OKEx is not the first to have problems with the private key management of the exchange. The most famous one was the unexpected death of Gerald Cotten, the founder of the Canadian exchange QuadrigaCX. However, the main digital currency of the exchange was stored in a cold wallet, and the cold wallet’s private The key is only known to Gerald Cotten alone, which led to the event that digital currency worth approximately US$147 million could not be withdrawn.

Further reading:
“Ponzi scheme runs a new way: the founder of the crypto exchange QuadrigaCX died abroad with his private key during his honeymoon period”

Or get involved in money laundering

According to a recent report by Xinhuanet, the second-review draft of the Criminal Law Amendment (11) was submitted to the Standing Committee of the National People’s Congress for deliberation on the 13th. The draft clearly stipulates “self-laundering” after serious crimes and violations related to doping. The second draft of the draft supplemented and improved the crime of manipulating the securities and futures markets, and further tightened the criminal law network. Amend the crime of money laundering, make “self-laundering” a crime after some serious crimes have been committed , at the same time improve the methods of money laundering, and increase the amount of money laundering by underground banks through “payment” settlement methods. The draft also adds provisions to increase penalties for the crime of fund-raising fraud.

Exchanges have always been the path of money laundering preferred by some criminals. Coupled with the “turbulent rumors” of OTC, exchanges may be involved in certain money laundering incidents.

Security related issues

According to Whale Alert monitoring, about 3 hours before the announcement, the OKEx exchange address successively showed a number of large transaction records.

The annual black swan in the currency circle? OKEx Suspends Withdrawal Suddenly

Beijing time 8:24
50 million TRON (worth about US$13,17074) transferred from the OKEx exchange address to an unknown address starting with TN4ecGJwiK1aiuD

Beijing time 10:02
The unknown address starting with 0xb45d461d07d561 is transferred to the OKEx exchange address to 13.87 million USDT (worth about 13.95 million US dollars)

Beijing time 10:22
The unknown address at the beginning of 0x6d8c32fcf2d95ff410ba is transferred to the OKEx exchange address to 21,000 ETH (worth about 7,959,837 USD)

Beijing time 15:50

A total of 997 bitcoins (worth approximately US$11.33 million) were transferred from multiple addresses of Huobi Exchange to OKEx Exchange addresses.

Update at 17:30, October 16, Beijing time:

“Cooperating with public security investigations” is OKEx founder Xu Mingxing

According to financial reports , nearly OKEx source said, OKEx announcement “with the public security agencies in the investigation” is the founder of Xu OKEx star. One of the people also said that Xu Mingxing had been taken away by the police at least a week ago and had not appeared in the work group for many days. “Actually, the announcement is very clear. What is a private key manager? Could it be that old Xu didn’t have it in his hands? Private key?” Talking about the follow-up development of the platform, he said that Xu Mingxing is more careful about the company’s financial expenditure management. If he can’t authorize it, it will affect various fees and the authorization of withdrawals. He personally authorized it.”

The chain news reminds that the above three are only possible guesses and do not represent the actual situation. The above-mentioned similar situations have also occurred in the continuous development of the encryption industry. Some of the events have also been well handled and continue to promote the industry’s development. There is no need to cause unnecessary panic. All information is subject to official news. At the same time, Chain News will continue to pay attention to the development of the incident.

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