Prime cryptocurrency alternate OKEx is within the information this week, with the alternate suspending withdrawals on its platform amid attainable cash laundering issues. Whereas the corporate is making an attempt to placate its clients that their funds are protected, nevertheless, a high official has apparently been roped into an investigation.
Doable Cash Laundering Hyperlinks
Earlier this week, native information supply Caixin reported that Mingxing “Star” Xu, considered one of OKEx’s founders, was just lately questioned by law enforcement officials. Because the information supply reported, Xu was questioned a few week in the past and has missed work steadily since then.
Whereas disturbing, the report additionally had some vagueness to it. For one, Caixin did not say the place the investigation came about, as OKEx is headquartered in Malta but additionally has an workplace in Hong Kong. The information supply additionally didn’t inform if he was nonetheless in police custody.
The event is coming after OKEx froze clients’ withdrawals on its platform. The alternate claimed in a assertion that it was having points with considered one of its personal key holders and had been unable to succeed in him.
“Certainly one of our personal key holders is at the moment cooperating with a public safety bureau in investigations the place required,” the corporate stated in its assertion, including, “Now we have been out of contact with the involved personal key holder. As such, the related authorization couldn’t be accomplished,” the alternate identified.
The alternate had been making some big-money transfers within the hours earlier than it initiated the freeze. In line with updates from on-chain tracker Whale Alert, it carried out outgoing transfers of 1,180 BTC (about $13.6 million), 50 million TRX (price about $1.three million), and 21,000 ETH (price about $7 million) to unknown wallets. The alternate additionally obtained a transaction price about $14 million in USDT tokens about six hours earlier than the announcement got here out.
It’s unclear what prompted your entire factor. Nevertheless, Colin Wu, a reporter for WeChat public account Wu blockchain, posited on Twitter that the entire thing may very well be a case of cash laundering.
Earlier, Wu had completely disclosed that the OTC service provider on OKEx had mistakenly obtained 500,000 CNY from the fraud group and was hunted by the police throughout the provinces.
— Colin Wu（WuBlockchain） (@WuBlockchain) October 16, 2020
“The Chinese language authorities is cracking down on cash laundering utilizing cryptocurrency for telecom fraud, and centralized exchanges are in a really harmful state,” Wu claimed.
One thing Smells Fishy
Though Caixin claimed that Xu is the important thing holder in query, information supply Mars Finance claimed in any other case in a competing report. Because the information supply guessed, Wu may very well be in custody regarding a backdoor itemizing for the OK Group in Hong Kong final 12 months. OKEx has additionally severed ties with Xu. The alternate defined that the founder hadn’t labored with the alternate shortly.
Much more difficult is the truth that OKEx seems to nonetheless be shifting funds regardless of the withdrawal freeze. Earlier right now, Whale Alert confirmed that the alternate had made two transactions – price 998 BTC ($11.three million) and 997 BTC ($11.three million) within the early hours of the day.
Whereas some have recommended that they may merely be delayed transactions, others consider that there’s some manipulation afoot.