Okex founder Star XU disappears, Okex stops payments
“Silhouette” by Johnathan Nightingale via Flickr.com. License: Creative Commons
There is currently a mysterious story about the International Börse Okex: Your founder Star Xu has disappeared after working with the Chinese police. At the same time, the stock exchange exposes the payments, supposedly because an owner has lost the private key. But the statements are contradictory. What is happening right now?
The Great International Börse Okex gave on 15. October known to suspend the payments. Okex emerged from the Okcoin Stock Exchange and is aimed at international traders. With a trading volume of several billions of dollars a day.
What is particularly noteworthy is the reason for the suspension of the payments that the stock exchange reports in somewhat cryptic sentences: “One of the owners of our private keys is currently cooperating with a public security office in an investigation. We have lost contact with the owner of the private key in question. Therefore, the associated authorization cannot be completed.”
The stock exchange uses multi-sig addresses for the storage of cryptocurrencies. This means that a transaction with several keys must be signed. Such a system is considered particularly safe. Now Okex says that one of the owners of the key is no longer available because he works with “public investigators”. Therefore, the stock exchange cannot generate the necessary signature for payouts.
Of course that would be far too strange to be true. A large, professional stock exchange can actually take the risk of making themselves dependent on a single person so that their disappearance leads to the dissolution of all coins? Because if cryptography works as it should, there is absolutely no way to mount the coins without the missing key.
In the case of OKEX, this would probably be coins worth a few billions of dollars. These coins would be visible to everyone on the blockchain, but as unreachable as if they were circle in a foreign galaxy. We have a classic example of the fact that security and security are not the same and that more security against thieves can lead to less security against accidents.
But it is far too difficult to imagine. How should that work operatively? Should the disappeared key owner sign each individual payment of OKEX by hand? That would be completely impossible. He only has to sign part of the transactions? He has a program on his computer that automatically signed transactions?
But if this explanation is so unlikely – why does Okex spoil you? There is actually no major accident than that. What really happened?
The story became more dramatic when it came out who it is allegedly: Xu Mingxing, also known as Star XU, the founder of Okcoin and Okex. In a message from the Chinese portal Caixin it says that he had previously worked with investigators “in the field of public security” and was “brought away by the police at least one week at the time before”. This message also causes more questions than it answered. Star XU was arrested? Or he worked with investigators and was now brought into a kind of witness protection program because you fear for your life?
In the meantime around 11 days have passed. Okex still does not pay cryptocurrencies, but there are some news that is hardly suitable, however, to make more than new rumors.
On the one hand, Okex has reactivated the P2P trade, through which users can buy cryptocurrencies with various currencies. Colin Wu from China comments on the fact that this indirectly shows that “the police investigation actually has nothing to do with the fact that Okex is involved in money laundering, but rather a personal problem of the founder.“If the police were trying to prevent active money laundering, Okex should hardly open the P2P trade. This is considered to be particularly susceptible to abuse through money laundering.
Yesterday Xu Kun from Okex commented on the situation: There are many rumors “who confuse the view of everyone”. The basic premise is wrong, the traders should “not listen blindly”. But he could not announce further information either. Also Jiu Mei, a manager of Okcoin, said one On the other article that has “nothing to do with him” after he was asked whether Xu Mingxing refuses to confirm payouts. “With force majeure we cannot solve the problem. But we discuss a plan.”
What was on the OKEX website is completely wrong? It’s not about an owner of the private key? Or wasn’t meant to Sun Xu? And the force means the Chinese government, but Jiu Mei is not allowed to say that?
The article concludes from the fact that it is rather unlikely that the withdrawals are exposed to the disappearance of Sun XU. Rather, “the police have frozen the payments for examination”. So it would not be a technical impossibility to pay the coins, but a legal problem. The coins do not float in a different galaxy, but are under police closure.
This in turn seems to contradict Colin Wus comment, it’s not about money laundering through Okex. At least superficial. It could be placed in rumors that the police were investigating a underground bank due to money laundering in which XU Mingxing was involved. As Collin Wu suspected, this would be a personal problem of the founder.
But why do you have to suspend all payments right away? The article speculates that the affected funds that are suspected of doing money are “circulating within Okex.“Therefore, all payments would have to be frozen until the investigation is completed. The claim that it is due to the missing key would therefore have been a fog candle because Okex must not say the truth, as is often the case in matters of money laundering, but the suspension of payouts demands an explanation. With the cryptic wording and closeness to the truth – the disappeared founder – it could have been a suitable excuse. But who knows?
The article ends with a nebulous but apt quote from Colin Wu. The reality often has several aspects, and in the normal world the reasonable explanation is 99 percent the right one. In the crypto world, on the other hand, the inappropriate explanation, which is only 1 percent correct, could be the valid. But you never know. “In short, in connection with China’s approach to money laundering and cryptocurrency, the Damocles sword actually hangs from all perspectives above the industry.”