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Bitcoin Price Index Plunges as OKEx Announces Freeze on Withdrawals

A recent news regarding OKEx is now spreading Fear and Uncertainty (FUD) towards the cryptocurrency sector. Major cryptocurrency exchange OKEx’s founding member is under investigation with the police and this prompted the exchange to halt any withdrawals of cryptocurrencies in the system. As a result of this, the overall Bitcoin price index fell almost 3% in 30 minutes earlier today before recovering slightly.

Founding Member Questioned by Police

The founding member of the OKEx in question is MingXing Xu, more popularly known as Star Xu. The Chinese cryptocurrency pioneer and proprietor of the exchange is being questioned by the local police and has been missing work for a while now as well. This is a sign of a continuing investigation and may not bode well for the cryptocurrency exchange overall. The Chinese government is known for not having a great relationship with the press, and as a result, little to nothing is known about the accusations on Star Xu at the moment.

OKEx Denies Xu’s Involvement with the Exchange

However, OKEx responded on these issues on their own and declared that Xu had nothing to do with the running of the company anymore. Jay Hao, the current CEO of the Chinese exchange gave a statement and said that the withdrawal freeze was initiated to help trader funds on the platform with user security particularly in mind. He said:

Bitcoin is a young asset that, until recently, was untethered to traditional markets,” the report said. “As it is integrated in institutional portfolios, it could become increasingly correlated with other assets.”

How Markets Responded

Despite the clarification from OKEx, the market responded and Bitcoin, the largest cryptocurrency by market volume fell more than 3% in 30 minutes as a result of this issue. OKEx’s native token called OKB has shed more than 15% of its value and the short-term future looks bleak overall. Till the exchange doesn’t start operating smoothly, this pressure on the market will remain. While there is no evidence that Star Xu is being indicted himself and it all could probably be a case of suspicious transactions being pursued by the Chinese government, the damage will be prolonged if the service isn’t restored in the immediate future. Cryptocurrency exchanges, especially centralized ones like OKEx have great power when it comes to withdrawals and ownership of Bitcoin and that is why in order to preserve the sanctity of the process, they are urged not to suspend withdrawals without concrete cause. Jay Hao is hopeful that the exchange’s withdrawal feature will be enabled once again.

Unknown Whale Transfers

Several large transactions also took place from OKEx’s wallets to other wallets before the suspension of withdrawals came into effect. Over $16 million worth of crypto was sent and received prior to this suspension. The wallets continue to receive more transactions despite this freeze, even bigger transactions at that according to big crypto transfer and ownership watchdog Whale Alert. This means that the total amount of Bitcoin in the suspended exchange is increasing and big players are not feeling the heat at the moment to start mistrusting the platform. However, the true purpose of these transactions is still unclear.

Image source: Marco Verch via Flickr

Talha Dar

Talha Dar

Cryptocurrency and blockchain enthusiast. Working on free economy and borderless solution side of things. Live and breathe crypto!


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