Cryptocurrency exchange OKCoin has assured users that its operations and services, including deposits, withdrawals and trading are operating normally after its founder Mingxing Xu, also known as Star Xu, was arrested in China.
Xu’s other crypto exchange, OKEx, suspended all cryptocurrency withdrawals indefinitely last week, citing a private key holder from the exchange is currently unavailable.
Chinese business media outlet, Caixin reported that Star Xu has been held in police custody at least for a week to help an investigation into the backdoor listing of OK Group in Hong Kong in 2019. At the time, OKC Holdings bought 60.5 percent of a Hong Kong-listed construction firm for $62 million.
Star Xu was arrested before by the police of Shanghai in 2018 on fraud charges after a group of investors claimed they incurred big losses due to a system crash they alleged OKEx orchestrated. However, he was released after 24 hours after assisting authorities’ probe into investors’ accusations that OKEx manipulated bitcoin futures.
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“OKCoin is a US based entity with the management team and headquarters in San Francisco. We do not expect this ongoing investigation of one of our directors will have any material effect on OKCoin’s global business operations,” the fiat-to-crypto platform said.
OKEx Suffers Large Outflows
OKCoin was one of the three major crypto exchanges in China before the authorities’ crackdown on the virtual asset industry, including a ban on ICOs in September 2017. Fleeing the hostile business environment, the exchange, along with its peers, has since shifted its operations overseas. OKEx, which works as a separate entity from OK Group and OKCoin, is headquartered in Hong Kong while being officially based in Malta, and its CEO is Jay Hao.
Following the news, and due to its big user base in China, large bitcoin outflows from OKEx went to its competitors. Nearly 10,000 BTC (worth $113 million) were transferred to other exchanges, including Binance, which received nearly half of this amount.
OKCoin has recently made an executive swap with its current CEO, Tim Byun, stepping down to assume his old role as Government Relations Officer (GGRO) of OKGroup. Meanwhile, OKCoin Chairman and one of its early investors, Hong Fang, has taken over as the newest executive director. The former Goldman Sachs banker also serves as Chief Operating Officer (COO) of the San Francisco-based OK Group.
OKCoin handled $19.7 million in cryptocurrency trading in the last 24 hours, according to CoinMarketCap. Its crypto-to-crypto entity, OKEx, is ranked the world’s 11th largest cryptocurrency exchange by adjusted trading volume, currently trading around $2.3 billion over a 24 hour period.