OKEx founder arrested, exchange pauses all withdrawals

Cryptocurrency exchange OKEx pauses all withdrawals, thus reporting its founder Xu Mingxing's arrest by Shanghai Police.

By · Oct 16, 2020 . 5min read

OKEx founder arrested news

According to Caixin, a local Chinese media outlet, OKEx founder Xu Mingxing has been arrested and has not turned up to work for a few days now. Caixin reported this latest development as the reason behind the sudden pausing of withdrawals from the top cryptocurrency exchange which happened today.

Earlier, OKEx had announced that some of the custodians of the exchange multi-sig wallet (private keys) are cooperating with law enforcement investigations.

Apart from Xu’s arrest, there’s been speculation on possible internal wranglings in OKEx. Jay Hao even arbitrarily confirmed it in a recent post on Weibo, a Chinese social media. According to Hao, although there were “personal problems”, none of it affects the exchange.

Moreso, Caixin claims that sources had told them that OKEx founder Xu complied with law enforcement and may have been arrested since a week ago.

OKEx withdrawal pause tanks Bitcoin price.

The news of OKEx founder took its toll on Bitcoin price. The foremost cryptocurrency fell by at least 2.5% from $11,511 to $11,223. As a top global cryptocurrency exchange, OKEx houses at least 200,000 BTC according to data from glassnode. This is about 1.1% of Bitcoin’s total supply.

OKEx founder arrested, exchange pauses all withdrawals
Number of Bitcoin held by OKEx wallets according to glassnode

Glassnode did also confirm that there were two large withdrawals of Bitcoins 48 hours before withdrawal suspension. OKEx approved two large withdrawals totalling 10,000 bitcoins some hours before the suspension of at least $135 million. However, there’s been no report of foul play, as exchanges occasionally initiate large withdrawals from their wallets.

Glassnode chart showing Bitcoin withdrawals from OKEx some hours before the suspension of withdrawals and subsequent news of Founder Xu’s arrest.

Apparently, this is not the first time the police have arrested OKEx founder Xu Mingxing. In September2018, Shanghai Police arrested Mingxing for his alleged involvement in WFEE crypto Ponzi scam.

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