The rumors of OKEx founder’s release brings some optimism back to the Chinese crypto market as the OKB Coin clicked $143 million volumes on Wednesday. It’s not clear whether this is a conditional bail or the end of the investigation.
The latest rumors in the market are that Chinese authorities have released Mingxing “Star” Xu, founder of crypto exchange OKEx. OKB Coin, the in-house token of OKEx derivatives exchange surged over 11% on Wednesday, November 18. At press time, while the news on OKEx is spreading, OKB Coin is trading 18.51% up at $5.71 with a market cap of $342 million.
In an indefinite move last month on October 16, OKEx suspended cryptocurrency withdrawals. This happened after Chinese authorities initiated a crackdown on the exchange after the private keys of account holders went missing. The authorities immediately arrested OKEx founder Xu and kept him in the custody for nearly a month.
However, the exchange has repeatedly denied their involvement in the matter of money laundering. The rumors of Xu’s release appeared on multiple platforms on Wednesday. Chinese crypto reported Wu Blockchain noted that Xu has “gained some freedom”. However, it is unclear if the Chinese police are releasing Xu on bail or completely ending the investigation.
Exclusive：Star Xu, the head of OKEx, one of China’s largest crypto exchanges, have gained some freedom. This may bring a little bit of optimism in the investigation storm sweeping the Chinese crypto industry. pic.twitter.com/Bvf0ZPytgO
— Wu Blockchain（Chinese Crypto Reporter） (@WuBlockchain) November 18, 2020
Soon as the rumors hit the market, OKB Coin trading volumes suddenly spiked. Earlier this week on Monday and Tuesday nearly $56 million worth of OKB traded on each day. On Wednesday, the volumes suddenly spiked to $43 million.
OKB Coin Is Up, OKEx Hasn’t Resumed Withdrawals Yet
While the founder’s release puts some optimism in the market, the crypto exchange hasn’t resumed withdrawals yet. One of the administrators of the OKEx Telegram chat said:
“Apologize for the inconvenience caused. It is not available yet. Even though I’m unable to share a time frame right now, my team is trying our very best to resume full platform functionality.”
The OKEx exchange crackdown has put some pressure on the Chinese miners. With the Chinese authorities going hard after the local exchanges, miners are finding it even more difficult to liquidate their capital. Well, according to Singapore-based trading firm QCP Capital, the rise in the demand and supply gap has further triggered the Bitcoin price rally. Note that Chinese miners alone control 70% of the Bitcoin mining power and hash rate. But OKEx is not the only exchange suffering from China’s crackdown. Wu Blockchain said:
“The COO of Huobi was also investigated by Shanxi police in early November. Several employees involved in OTC were reported to assist in the investigation. But Xu’s gaining a certain degree of freedom may also be good news for Huobi”.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
