The OKEx situation underlines the dangers of exchange wallets
|- The status of OKEx founder, Mingxing "Star" Xu, is still up in smoke.
- The fiasco highlights the importance of having control over your private keys.
Around two weeks back, OKEx founder, Mingxing "Star" Xu was arrested by the police and hasn’t been seen since. Following that, OKEx suspended withdrawals claiming one of the holders of the exchange’s private keys was absent since they were “cooperating with a public security bureau in investigations.” While it’s widely speculated that Xu is the holder in question, media resource Mars Finance clarified that he isn’t related to the exchange’s withdrawal issue.
The current status of OKEx
As per Colin Wu, a well-known Chinese reporter, the Shanxi police suspended coin withdrawals to do their investigation, and it’s not known as to how long this will take place. As of now, it seems like OKEx s still discussing solutions. While they have organized a rescue team to respond, they are quickly running out of time.
4. OKEx organized a rescue team to respond, but time is passing by day by day. If Star Xu is not released within the next two weeks, he must be arrested by the procuratorate, which means it is unlikely to be innocent and the problem becomes more troublesome.
— Colin Wu（WuBlockchain） (@WuBlockchain) October 26, 2020
4. OKEx organized a rescue team to respond, but time is passing by day by day. If Star Xu is not released within the next two weeks, he must be arrested by the procuratorate, which means it is unlikely to be innocent and the problem becomes more troublesome.
— Colin Wu（WuBlockchain） (@WuBlockchain) October 26, 2020
Not your keys, not your coins
This whole saga sadly highlights the relative immaturity of the crypto market. In exchanges as well known as OKEx, there seems to be little customer protection in place. The thing to keep in mind about exchange wallets is that they are not really in your control.
Firstly, they are known as “hot wallets,” as they are continually connected to the internet, making your coins extremely vulnerable. Secondly, as we have seen with OKEx, you may not have full control over your private keys. When it comes to cryptocurrency wallets, you should have complete control over your private keys to access your coins. As the saying goes, if you don’t have control over your private keys, you lose control over your coins.
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