OKEx suspends withdrawals amid security investigation

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Digital currency exchange OKEx has suspended withdrawals. In a notice on its website, the exchange said one of its private key holders was cooperating with authorities on an investigation and had been out of touch, which resulted in the withdrawal suspension.

OKEx took to Twitter to inform its users that it was suspending withdrawals. However, all the other functions would not be affected. It also assured the users that their funds were safe and had not been in any way affected by the incident.

Withdrawals of digital assets/cryptocurrencies @OKEx are currently suspended. Other functions are up and running. Your funds and assets are safe and not affected. Details: https://t.co/vMehdsZs1b

We sincerely apologize for any inconvenience. Further announcements will be made. pic.twitter.com/t14l7z0EUL

— OKX (@okx) October 16, 2020

In an accompanying notice on its website, the exchange revealed that one of its private key holders was “currently cooperating with a public security bureau in investigations where required.” The concerned private key holder had been out of touch with the exchange.

As per its Terms of Service, which allow it to terminate or suspend its service without prior notice, OKEx decided to suspend withdrawals on October 16 at 11:00 Hong Kong time.

According to Red Li, the founder of China’s digital currency news outlet 8btc, OKEx had first announced it would suspend withdrawals by 15 p.m., but later revised it to 11 a.m.

#okex first stated withdrawal will be suspended 15PM but quickly changed to 11AM. Rumor has it that over 800 accs in "certain" exchange are involved with cross-border money laundering. #btc #crypto pic.twitter.com/mc67ZRCj6O

— Red Li (@redtheminer) October 16, 2020

“We assure that OKEx’s other functions remain normal and stable and the security of your assets at OKEx will not affected,” the exchange stated on its notice.

OKEx CEO Jay Hao took to Twitter as well to reiterate to the users that their funds were safe and that all the other operations would remain unaffected. Hao also revealed that the private key holder who was working with authorities on an investigation was doing so in a personal capacity and that it wasn’t related to the exchange.

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.

— OKX Intern (@okx_intern) October 16, 2020

OKEx pledged to resume withdrawals once the concerned private key holder is able to authorize transactions. The exchange also pledged to keep its users updated on any new developments regarding the incident.

OKEx has yet to issue any more details regarding the incident.

In March 2020, OKEx experienced a system failure that caused its perpetual swap order book to lag for short period of time. The exchange pledged to reasonably compensate any users who had failed transactions due to the failure.

This is a developing story.

See also: CoinGeek Live 2020 panel, The Future of Exchanges & Trading in a Tokenized World.