OKEx users flee the exchange despite the assurances from the exchange while the crypto withdrawals have been suspended for two weeks as we can see in today’s tether coin news.
The Chinese police ordered the suspension of withdrawals on the exchange after they brought in the owner of the exchange Xu MingXing into custody. Bitcoin and USDT trading is conducted at a 30% discount on the exchange as customers lost trust in the platform. The live updates from the exchange on the situation of the pending withdrawals read that the funds are safe and unaffected as two weeks passed with suspended trading. The owner of the crypto exchange is still held by the Chinese police.
2. The OKEx spokesperson stated in some channels: The preconditions for the guessing of the withdrawal are wrong, and there is force majeure, which cannot be resolved now. This error may mean the rumor that Star Xu possessed the private key and refused to withdraw the coin.
— Colin Wu（WuBlockchain） (@WuBlockchain) October 26, 2020
The Shanxi police brought the owner of the Chinese crypto exchange on October 16th. since then, the withdrawals have been suspended. The owners’ arrest was allegedly not related to the exchange but the Chinese police forced suspension of withdrawals to investigate the matter further. If Xu is not released in two weeks, he will be arrested according to Chinese law. This could also imply more delays in the resumption of the withdrawals. The longer the delays the bigger the issue. A few instances from the past including the BitFinex hack in 2016 and QuadrigaCX were all preceded by similar delays.
The current OKEx situation has another important similarity with QuadrigaCX as its CEO Gerald Cotton, was the sole owner of the private keys of the platform. OKEx however, denied these claims. The balance on the exchange is above 205,000 BTC which is worth $2.7 billion and this figure accounts for 1.1% of the total circulating supply of BTC. This exchange is the biggest futures platform with an unsettled volume of futures contracts that are worth $1.02 billion. The only option for the users is to start selling their crypto using the exchange’s P2P platform for INR, VND, or CNY.
As the delay continues, the users are leaving the platform, and BTC and USDT are selling at a discount of 30%. The hashrate on the OKEX mining pool dropped as well around the same time as its withdrawal suspension. Even if the platform or its owner has nothing to worry about, the delays make the customers anxious since the platform is losing credibility.
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