OKEx – one of the largest cryptocurrency exchanges in the world – has been trapped in some legal issues as of late.
The Head of OKEx Has Been Taken Into Custody
Just last week, it was reported that the company had suspended all withdrawals, alleging that it had lost access to one of the private keys necessary for maintaining funds and keeping transaction records. However, it is now being alleged that the founder of the exchange was arrested and taken into custody, and that this is the real reason for the suspension.
The founder of OKEx is named Xu Mingxing. He was taken in roughly two weeks ago and had failed to make meetings scheduled in an office-based social media platform that the company used to send messages and discuss operations with team members.
At the time of writing, it is unclear what he has been arrested for and what the corresponding investigation is related to, though there has been a surge in raids on companies that have potentially been involved in money laundering and other financial crimes as of late, and many analysts wonder if perhaps Mingxing was involved in something like that.
OKEx has explained that its private key holder – which at this time, we must likely assume is Mingxing – is cooperating with legal authorities with what the company is calling a “public security bureau.” It’s unclear what this bureau is or where it is stationed, though some anonymous employees of the exchange have allegedly confirmed with other sources that the keyholder is Mingxing, who they claim has a very “hands-on” approach to managing money.
Private keys are often utilized to permit or stop transactions. This explains why Quadriga CX – one of the leading cryptocurrency exchanges in Canada – has been in so much trouble as of late. The company’s head executive, Gerald Cotten was allegedly the only man to hold the private keys necessary for accessing funds for the company, and he passed while doing work in India.
This Sounds Familiar…
This prevented any other person from gaining access to the money held within the many accounts. As a result, nobody could engage in trades or withdraw their funds. Customers then turned to harassing his widow in the hopes that doing so would give them the information they needed, and when that didn’t work, they initiated a class-action lawsuit against the exchange. It later turned out that Cotten had purportedly embezzled user funds.
The situation is similar in that Mingxing has been accused of fraudulent behavior before. In September two years ago, several people had filed complaints against OK Coin – a bitcoin exchange platform he owned – claiming that they had incurred heavy losses thanks to the platform crashing after bitcoin’s price fell. He was later detained by police. OK Coin then closed its China headquarters after the nation banned initial coin offerings (ICOs).
