OKEx Suspends Crypto Withdrawals, Founder Goes Missing

Major cryptocurrency exchange OKEx has suspended all cryptocurrency withdrawals after it lost touch with one of its key custodians, the firm said in a notice on its website on 16 October.

According to the announcement, the unnamed holder of the key has been “out of touch” with the exchange for a while, preventing the associated withdrawal authorization from being completed. The exchange further assured its users that the security of their assets “will not be affected” by the event, and that withdrawals will once again be available once the key holder is “able to authorize the transaction”.

The notice reads:

“We assure that OKEx’s other functions remain normal and stable and the security of your assets at OKEx will not affected. We will make public announcement in a timely manner on any important development of the matter. We will resume digital assets/cryptocurrencies withdrawals immediately once the concerned private key holder is able to authorize the transaction.”

Shortly after the notice was published the exchange’s CEO, Jay Hao, took to Twitter to point out that non-crypto withdrawals should still be working on the platform, claiming that only crypto withdrawals were affected at this point. While OKEx’ notice stated that the key holder was missing as he was “cooperating with a public security bureau in investigations,” Hao stated that it was over a “personal issue only” and that it will not affect the exchange’s business.

Hours before the notice was published, monitoring service Whale Alert noticed OKEx completed several significant withdrawals from known addresses. In a matter of six hours, the exchange made outgoing transfers of 1,180 Bitcoin (BTC) worth around $13.6 million, 50 million Tron (TRX) worth $1.3 million, and 21,000 Ethereum (ETH) worth $7.7 million. There was also one incoming transaction in Tether (USDT) worth around $14 million.

The Friday notice was followed by a report from Chinese news agency Caixin, which claimed that two sources close to the exchange indicated that the missing key holder was OKEx’ founder Mingxing Xu, also known as Star Xu. The sources further revealed that Xu was taken by the police about a week ago, and that he has been absent from work since then. Later in the day some suspicions arose that Xu was taken in under suspicions of money laundering, but a spokesperson from OKEx told CoinDesk:

“We are not at liberty to discuss any matters that are under investigation but can reveal that it is not related in any way to AML or to OKEx.”