As the crypto market continues to grow to new heights almost daily – Bitcoin (BTC) is currently around the $ 16,100 threshold – The darkness surrounding the OKEx crypto exchange has continued.
OKEx initiated a cryptocurrency withdrawal suspension on October 16Citing the unusual reason that one of the company’s private key owners had been working with local security agencies and therefore it was in their clients’ best interests that any cryptocurrency movement emanating from the exchange stop for the moment.
In addition, the OKEx team was unable to clarify the situation. For example, Unconfirmed reports were released just a few days before the company’s shutdown that the Chinese co-founder of the exchange, Mingxing “Star” Xu, was arrested.This leads many of the company’s customers to believe that there could be more than meets the eye.
For more clarity on this developing situation, Cointelegraph contacted OKEx. A company spokesman said the company could not comment at this time due to the “sensitive nature” of the ongoing investigation. However, they added:
“We want to reiterate to all OKEx users and reassure them that their funds are safe and that all other services are not affected. We sincerely apologize for the temporary suspension of withdrawals. Our teams are working tirelessly to get our services back to full use … so soon as possible. The safety of our users’ funds and assets on the OKEx platform remains our top priority. “
OKEx silence was confusing
It’s been almost a month since OKEx announced it was suspending client cryptocurrency withdrawals, which is a long time, especially for an exchange as large as OKEx. To put things in perspective, the ZB.com exchange took place on September 17th suspended your customers’ transactions for 48 hours. That was enough for the company to feel strong pressure from its customers and send the company’s security team to work day and night to resume normal business services. Omar Chen, CEO of ZB.com, told Cointelegraph:
“The voice of the market changed a lot in response to the OKEx incident, from the initial feeling of trust and relaxation by users to the many complaints and even anger. All in all, we expect OKEx to be as soon as possible back to normal. “
Ben Zhou, CEO of ByBit – a crypto derivatives exchange – believes that the issues surrounding OKEx are still very uncertain for now, but it is best not to draw any conclusions as certain key aspects of the matter remain unfounded. However, he added: “Trust goes both ways and is built through transparency. We are convinced that we benefit from keeping our customers informed. Putting them on hold is not a healthy and sustainable solution“.
Does OKEx affect the industry’s market perception?
It is logical that the aforementioned OKEx black swan incident has had a detrimental impact on the market, especially from a regulatory perspective. OKEx is a very popular futures exchange, and in today’s crypto investment environment, where the demand for many digital assets is increasing daily, the loyal customers seem to have seen very concerned. On the subject, Chen added:
“If OKEx doesn’t survive this incident, the crypto market is likely to crash by damaging user trust, which also affects the popularity and use of digital currencies.”
For security reasons, Lior Lamesh, CEO and co-founder of cybersecurity company Blockchain GK8, Believes OKEx’s ongoing saga is a classic example of exploitation of a single flaw in the exchange’s security architecture. And although this bump could be frustrating for many, Lamesh believes that reputational damage is primarily limited to OKEx and does not affect the industry as a whole.
After the incident, the value of Bitcoin was barely affected. The coin fell about 3% immediately after the announcement, only to rebound almost immediately. This seems to indicate that the digital asset market is gradually evolving and is reaching a level of maturity where investors can be confident that the market will be less volatile during major events. Lamesh added, “With the right custody infrastructure, digital assets still have strong growth potential for the foreseeable future.”
An incident can help redefine the security standards of the crypto industry
One possible effect OKEx’s silence could have on the crypto sector is to help users better understand that multi-signature or multi-party computing solutions may not be secure enough given the known situation. since they all tend to share a single point of failure that can be exploited – either by external or internal hacking. With that in mind, the OKEx payout freeze incident affects less the cryptocurrency owners themselves than the exchanges that manage their funds.
After all, the risk of losing or blocking crypto assets has been a major barrier to entry for professional participants in financial markets such as hedge funds and asset allocators.
The custody problem has been around for a long time, but several new technologies have emerged recently – such as: B. decentralized exchanges, decentralized derivatives and oracles – that have tried to respond to the current security requirements of the industry.
So, It will be interesting to see how things play out in this regard over the coming months, and to find out what is behind the OKEx withdrawal freeze. Perhaps some of the newer technologies can be taken over by a central exchange for later increased transparency and trust.