Experts Say Chinese Authority Clampdown On OKEx A Clear Warning To Crypto Exchanges
Experts and analysts alike have warned crypto exchanges worldwide to be careful in the wake of China’s clampdown on the renowned crypto exchange platform, OKEx.
In what has now been termed the longest crypto clampdown in history, it has now spanned over a month that Chinese law enforcement arrested the founder of OKEx, Star Xu. Following the arrest, the china based crypto exchange also announced to its users that it has disabled withdrawal services. With the police choosing to keep the matters under wraps, rumors have tailed why the founder was picked up in his office and the present state of the crypto exchange.
China targeting crypto exchanges that target Chinese nationals
This move has made experts question if there is a present clampdown on Chinese crypto exchange that uses their affiliations conveniently. OKEx, for example, is a Chinese crypto exchange that has its headquarters in Malta and has offices in other parts of the world, including Malaysia, which is its official address.
The company also claimed to have offices in Beijing and Shanghai and used to make a good example. Chinas anti-crypto laws currently target exchanges that operate majorly outside china but targets Chinese nationals like OKEx.
Chinese authorities have always kept investigations under wraps till they finally collate all the needed evidence to charge the erring parties to court. With this being the case, experts have explained some of the things that might be going on in the background most people do not know about.
In the events leading to the situation where OKEx is today, the founder was arrested, which led to a suspension of activities on the platform. According to two people close to the exchange, the founder was held at least two weeks before the withdrawals were suspended.
The founder of Huobi has been previously investigated for fraud
After the arrest and several misleading media publications, the CEO of OKEx, Jay Hao, tweeted that the investigation was opened concerning some issues involving someone that held a private key in the company. In another series of tweets, the crypto exchange calmed the air as it said the investigation was not about them or concerning the breaking of the law.
The announcement of the arrest was the catalyst the OKB token needed as the bears took over, and it dropped from $5.82 to $4.12, but it has regained composure and currently trades around $4.84.It appears that the founder of the crypto exchange, Star Xu, has always had a run-in with authorities as a September 2019 event saw him being investigated.
OKEx was said to have manipulated market data with Xu being investigated for fraud. Not long after, Xu resigned as the CEO and has kept his distance from the company since then. As it stands, activities have not yet returned to normalcy as its customers are now frustrated when they can finally access their funds.