Cryptocurrency exchange OKEx halts withdrawals as founder said to be in Chinese custody

October 16, 2020.

OKEx, a cryptocurrency exchange, has suspended all withdrawals due to an unnamed private key holder cooperating with an inquiry in China, a company spokesperson said Friday.

The exchange, which first revealed the suspension in a post on its website Friday, did not share many details regarding the matter, although it said that it has not been in correspondence with the person. However, Chinese business publication Caixin reported that the exchange’s founder, Xu Mingxing, is in Chinese custody.

“One of our private key holders is currently cooperating with a public security bureau in investigations where required,” OKEx said in its website post. “We have been out of touch with the concerned private key holder.”

The spokesperson declined to comment on whether the person OKEx referred to is Xu, who is also known as Star Xu, or on details of the public security bureau’s probe. Xu is OK Group’s founder, according to the company’s Medium blog account. The spokesperson for the exchange said that it has been separate from OK Group since 2017.

“OKEx is a separate entity from OK Group and, as such, we are not in a position to comment on any actions or activities related to Star Xu,” the spokesperson said.

China’s involvement in the inquiry was previously confirmed by the Financial Times.

Despite the tense situation, the OKEx spokesperson told Fastinform that funds remain safe.

“This was a difficult decision to make, however, the security of our users’ crypto assets is of paramount importance to OKEx,” the spokesperson said. “We assure our users that all funds are safe and no other functions have been affected on the exchange. We will be doing everything in our power to restore normal service as soon as possible.”

OKEx is headquartered in Malta and has its marketing operations team located in Hong Kong, the spokesperson said. The exchange relocated to Malta in 2017 after being registered in Belize, the spokesperson told Fastinform.

The exchange said in its post that it hopes to allow withdrawals again.

“We will make public announcement in a timely manner on any important development of the matter,” OKEx said. “We will resume digital assets/cryptocurrencies withdrawals immediately once the concerned private key holder is able to authorize the transaction.”