OKEx, one of the most popular cryptocurrency exchanges, suspended withdrawal operations yesterday, causing a lot of confusion in the community and a sharp drop in market prices.
In a formal statement, OKEx believes the reason for the suspension of the withdrawal is because one of the company’s private key holders is currently working with the Public Security Bureau to conduct the necessary investigations.
Apart from the rapid price dumps for cryptocurrency assets, further confusion emerged following reports claiming that police officers have taken away company founder Xu Mingxing over a week ago, and he hasn’t returned yet.
However, the company spokesman stated that OKEx Exchange is an independent unit of the OK Group and therefore cannot comment on actions or activities related to Xu Mingxing.
The OKEx statement lacks more detailed information on the nature of the main problem. However, the company guaranteed that all funds on the platform will be safe and only withdrawals are suspended. Other activities such as deposits, trading, derivatives and mortgages are still ongoing.
The company emphasized that there is no “cause of the alarm” for users and they do not need to worry about their resources.
OKex Has Almost 200,000 BTC in its Holdings
Data shows that OKEx users have nearly 200,000 BTC in their wallets in total. Taking into account the current Bitcoin spot rate, this amounts to $2.3 billion, which corresponds to 1.1% of the cryptocurrency in circulation.
Following the recent confusion over OKEx withdrawals, on-chain market analyst Glassnode released data on the number of bitcoins held on the exchange.
Although OKEx CEO Jay Hao has assured users that their funds are safe and that there is no “worrying cause”, the vastness of the above bitcoin stash is pretty alarming. Especially because one single organization controls everything.
Another cause for alarm is the fact that the officer who has access to the private key is currently out of touch. OKEx employees cannot contact this person. Such huge BTC holdings put them at risk of a coordinated attack.
Comparing with BitMEX Exchange Issues
After the CFTC accused BitMEX’s founder of violating anti-money laundering laws, CTO Samuel Reed was arrested and a large amount of BTC was exported.
According to the company’s first data released on October 2nd, wallets around BitMEX contain nearly 170,000 BTC in total. The withdrawal began a few hours later. Since October 5th, more than 45,000 bitcoins have withdrawn from BitMEX. The largest “negative net flow” occurred on October 2nd, namely 44,000 BTC.
Overall, BitMEX fell nearly 27% in Bitcoin deposits. Of course, the amount of these transfers is very high.