As the cryptocurrency market continues to climb to new highs almost daily – with Bitcoin (BTC) currently approaching the $ 16,100 threshold – the confusion surrounding the OKEx cryptocurrency exchange continues.
OKEx began suspending cryptocurrency withdrawals on October 16, citing an unusual reason for one of the company’s private key holders cooperating with local security services, and thus it was in the best interest of clients that any cryptocurrency movement originated from the exchange being temporarily suspended.
The OKEx team also failed to clarify the situation. For example, a few days before the company’s funds were withdrawn, there were unconfirmed reports of CCX co-founder Mingxing “Star” Xu being arrested, leading many of the company’s clients to believe that there could be more of this than meets the eye. .
To get more clarity on this evolving situation, Cointelegraph reached out to OKEx. A company spokesman said the company was currently unable to comment due to the “sensitive nature” of the investigation. However, they added:
“We want to assure and assure all OKEx users that their money is safe and that all other services remain unchanged. We sincerely apologize for the temporary suspension of withdrawals. Our teams are working tirelessly to restore our services to their full capacity as quickly as possible. The security of users’ funds and assets on the OKEx platform remains on Our top priority. ”
OKEx silence is baffling
It’s been almost a month since OKEx announced that it would suspend withdrawals of cryptocurrencies from clients, which is a long time frame, especially for a large exchange like OKEx. In comparison, on September 17, the crypto exchange ZB.com halted its customers’ transactions for 48 hours. This was enough for the company to feel strong pressure from its clients, forcing the security team to work day and night to resume normal trading services. Omar Chen, CEO of ZB.com, told Cointelegraph:
“The market voice has changed a lot in response to the OKEx event, from the initial feeling of confidence and relaxation of the users to the many complaints and even anger. In general, I hope OKEx will return to normal as soon as possible.”
Ben Zhou, CEO of ByBit, a cryptocurrency derivative exchange, believes that although the problems surrounding OKEx remain very vague at the moment, it is best not to draw conclusions, especially since some important aspects of the problem remain unfounded. But he added, “Trust goes both ways and it is built on openness. We are convinced that we benefit from keeping our customers informed. Leaving them in limbo is not a healthy and sustainable solution.”
Does OKEx harm the industry’s perception of the market?
It goes without saying that the aforementioned OKEx black swan event has had a negative impact on the market, especially when it comes to regulation. OKEx is a very popular derivative exchange, and in the current cryptocurrency investment environment, with the demand for many digital assets increasing daily, it appears that loyal clients have been hit hard. On the occasion, Chen added:
“If OKEx does not survive this event, it will likely cause a downturn in the cryptocurrency market, which will reduce user confidence, which will also affect the popularity and use of digital currencies.”
From a security perspective, Lior Lamesh, CEO and co-founder of the blockchain cybersecurity firm GK8, believes that OKEx’s ongoing saga is a classic example of one flaw in an exchange’s security architecture. And while this disparity down the road may bother many, Lamish believes that any damage to reputation will be limited primarily to OKEx and will not affect the industry as a whole.
After this incident, Bitcoin’s value was barely affected: the currency fell about 3% immediately after the announcement, but recovered almost immediately. This appears to indicate that the digital asset market is now beginning to develop and has reached a maturity stage as investors can be assured that the market will be less volatile during major events. “With the right infrastructure for custodians, digital assets still have great growth potential for the foreseeable future,” Lamish added.
The incident may help redefine the security standards for the crypto industry
One of the potential consequences that OKEx’s silence might have on the crypto sector is that it might help users understand that in light of what is known about the situation, multi-signature or multi-party computing solutions may not be secure enough, as they all have a propensity. To share a single point of error can be exploited – whether that’s outside hackers or insiders. In this sense, the OKEx withdrawal freeze event will not affect the cryptocurrency owners themselves much, but rather the exchange.