Bitcoin and Tether Selling at 30 Percent Discount on OKEx Following Withdrawal Suspension
Despite assurances from the crypto exchange platform OKEx, users have reportedly begun to fear the worst.
According to live updates from OKEx on the situation of pending withdrawals, the funds are safe and unaffected in spite of almost two weeks of suspended trading. The owner of the exchange, Xu MingXing, has been taken in and is still held by the Chinese police.
OKEx Exchange Owner Under Police Investigation
The cryptocurrency exchange platform’s owner has been bought in by the police on October 16th, and since then, withdrawals have been suspended on the website.
Although Xu’s apprehension is reportedly not related to the exchange, the police have ordered the suspension of withdrawals to allegedly conduct investigations. According to Chinese law, if Xu is not getting released within two weeks – which complete tomorrow – he will be arrested.
This could mean that the withdrawal resumption will be further delayed.
3. In fact, according to Wu's information, the Shanxi police suspended the withdrawal of the coin to investigate. No one knows how long the investigation will take. At present, it seems not very optimistic, because the people at OKEx said that they are still discussing solutions.
— Colin Wu（WuBlockchain） (@WuBlockchain) October 26, 2020
Obviously, long delays in withdrawals are never a good sign. A few past instances, such as the Bitfinex hack in 2016 and the QuadrigaCX incident, were preceded by such delays. The current OKEx situation has a striking similarity with the QuadrigaCX event: the sole owner of the exchange’s private key is the CEO.
The Bitcoin balance on the platform is above 205,000 BTC, worth $2.7 billion – the sum accounts for 1.1 percent of Bitcoin’s total circulating supply. OKEx is also the largest futures platform with a massive volume of futures contracts worth around $1.02 billion.
The only option remaining for OKEx users – if the withdrawal restriction remains – is to sell their funds via the exchange’s P2P platform. According to reports, users are already leaving the exchange as the delay continues. Bitcoin and USDT are selling at a discount on OKEx at around $10,000 and $0.75, respectively.
OKEx pool Bitcoin hashrate. [Image Source: Okex]
Also, the hashrate on the OKEx mining pool has plummeted significantly as the withdrawal restriction got implemented. Even if the platform or the owner is not to worry about, the withdrawal delays make users anxious, and the exchange keeps losing credibility.
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.