200k BTC Holder, OKEx, Suspends Crypto Withdrawals & Its Founder Gets Arrested

Major cryptocurrency exchange OKEx announced on Friday that it had suspended the withdrawals of digital assets while ensuring “funds and assets are safe and not affected.”

Other functions, meanwhile, are up and running.

All operations @OKEx except digital asset/cryptocurrency withdrawals remain unaffected.

All your funds and assets are safe.

The investigation concerns a certain private key holder’s personal issue only. Further announcements will be made.

— Jay_OKEX_CEO (@JayHao8) October 16, 2020

The withdrawals are not allowed because one of the exchange’s key holders has been “out of touch” as he is currently cooperating with the public security bureau in investigations. The exchange said it is not in contact with the concerned key holders; thus, the associated authorization could not be completed.

The exchange later said the investigation is due to the key holder’s “personal issue.”

“Rumours about ~800 accounts involved in cross-border money laundering,” tweeted investor Alistair Milne.

The withdrawals will be resumed once the private key holder in question authorizes the transactions.

“Pursuant to 8.1 Service Change and Interruption of the Terms of Service, OKEx may change the Service and/or may also interrupt, suspend or terminate the service at any time with or without prior notice,” wrote the exchange.

https://t.co/iCuUg56iUT

so yeah… pic.twitter.com/vLZesmxYLg

— i.am.nomad (@IamNomad) October 16, 2020

According to Caixin, the founder of OKEx, Star Xu was also taken by the police a week ago and “had not appeared in the work group for many days.”

The crypto community was boggled with the fact that the popular exchange can’t process withdrawals in the absence of one keyholder.

“What kind of messed up setup is that? What if something happens to one of them? When one of the Bitmex ones got arrested they processed withdrawals even faster (to calm down the market),” noted WhalePanda.

In response to the news, the price of its native token OKB dropped 17% before finding ground above $5.

Bitcoin's price also dropped about 3% to nearly $11,200 level; currently, it is trading above $11,300 but still in the red along with the broad crypto market.

According to the data provided by Glassnode, about 200k BTC or 1.1% of bitcoin’s circulating supply, worth around $2.3 billion, is held in OKEx wallets.