OKEx announces withdrawal suspension, causing BTC to drop

Written by: Ali Raza
October 16, 2020
  • OKEx exchange suddenly announced that withdrawals will be disabled until further notice.
  • The exchange was vague with the details, but speculators theorize that the move is tied to money laundering.
  • BTC and OKB prices saw a sharp drop, but the recovery has already started.

Major cryptocurrency exchange, OKEx, suddenly suspended cryptocurrency withdrawals earlier today, October 16th. According to its announcement, withdrawals were stopped at 11:00 Hong Kong time, while the rest of the services provided by the platform continue to function without issues. However, the announcement caused Bitcoin and OKB to see a significant price drop.

What happened?

According to OKEx’s announcement, the reason for the suspension of withdrawals is the fact that “One of our private key holders is currently cooperating with a public security bureau in investigations where required.  We have been out of touch with the concerned private key holder.  As such, the associated authorization could not be completed.

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While the exchange is a bit vague with the details, it claims that withdrawals of crypto assets will resume immediately after the key holder becomes able to authorize transactions.

In other words, this is no security incident that would be capable of affecting the customers’ assets. However, the move had other consequences.

Speculators came up with a theory behind the move

It is also worth noting that Colin Wu, a reported from Beijing, tweeted that the reason for the event was the fact that an OTC merchant on OKEx seemingly received 500,000 CNY by mistake, and that the money came from the fraud group. The merchant was then hunted by the local police.

In other words, the mentioned investigation could be related to money laundering — something that the Chinese government is extremely strict and serious about, and is quick to crack down on.

As mentioned, the sudden announcement resulted in a sharp price drop that affected Bitcoin, as well as OKB. OKB price, which used to sit at the resistance at $6, suddenly crashed by 15%.

Bitcoin saw a much greater price loss, of course, although the drop percentage for the coin is only 3%.

At the time of writing, both assets have already started seeing recovery.