OKEx resumes P2P trading, withdrawals still unavailable

OKEx, one of the world's largest cryptocurrency exchanges, has fallen for evil days recently. On October 16, Chinese police launched an investigation against the trading platform and allegedly arrested one of the founders. The exchange was forced to freeze the withdrawals, causing a panic in the cryptocurrency market. 

However, the platform starts coming back to life. In this story, we will discuss the recent developments in OKEx and dive into what happened to the trading platform and what to expect. 

Good news first: OKEx resumes P2P trading 

OKEx, one of the world's largest cryptocurrency exchanges, will resume P2P trading for three fiat currencies as of 12:00 pm (UTC), October 21. The platform users have not been able to trade cryptocurrency for fiat on OXEx since Friday, October 16, when the company disabled the fiat trading tunnel and suspended the withdrawals. 

At the time of writing, the P2P trading page on OKEx shows no activity.

 OKEx: P2P trading

 Source: OKEx

According to the official announcement published on the company's blog, users will be able to resume P2P trading with the Chinese Yuan (CNY), Indian Rupee (INR), and Vietnamese Dong (VND). 

The platform urges users to avoid off-escrow trading as it may lead to unwanted consequences and disputes. 

For your safety, avoid off-escrow trading as this runs the risk of scams or disputes for which you would be unprotected. As always, please, practice proper risk management when trading, and stay updated for any announcements on our official communication channels. 

The timeline of events 

The trading platform spooked the cryptocurrency markets on Friday, October 16, by disabling the crypto-to-fiat trading and suspending cryptocurrency withdrawals. 

The company explained that it was out of touch with one of the private key holders, meaning no authorization requests could be completed. Later it turned out that the company was involved in the security bureau in investigations, while one of the founders might have been under arrest. 

OKEx's founder, Xu Mingxing, confirmed on October 18 that their legal counsel Xu was under an investigation by China's police enforcement, and the company could not reach him to verify the information. 

Chinese traders trapped 

Meanwhile, for several years, OKEx was the only leeway for Chinese users to jump into the cryptocurrency market with fiat. In September 2017, the Chinese authorities banned all direct crypto to fiat trading in the country that accounted for the biggest share of the global cryptocurrency trading volumes at that time. 

Thus, the Malta-based OKEx only fiat on-ramp and off-ramp for Chinese crypto traders who suddenly found themselves cut off from their assets. However, now they virtually lost access to their assets.

Groping for exit 

Typically, OKEx provides escrow services for fiat-to-crypto trading on its P2P platform. It means that various OTC merchants can post bid or ask prices for a certain cryptocurrency against a supported fiat currency, while OKEx process the transactions off-chain. 

Thus, if someone sends yuan to an OTC merchant on OKEx to buy crypto, the platform credits the newly purchased coins to the buyer's account as an internal transfer. Similarly, users can send each other coins and fiat directly as long as they know each other's unique ID on the exchange. 

However, when OKEx froze withdrawals, users were forced to seek for different ways to get their assets out of the exchange. Twitter users report that people were trying to sell their USDT and BTC locked on OKEX with 10%-20% discount in a P2P fashion. 

The exchange blocked several accounts once it identified this activity. The company cited the risks related to dealing with unauthorized platforms. 

Multiple accounts have triggered our risk management system. As a result, those accounts have been automatically banned for internal transfers. To ensure the safety of your assets, we'd like to remind users not to engage in unauthorized platforms," the company said in the recent tweet. 
 

The funds "SAFU" but not available 

The OKEx announced the resumption of P2P trading with fiat, but withdrawals are still unavailable at this moment. The company tries to assure users that their funds are safe, but the community is furious as they cannot access their money and have no clue when the withdrawals are enabled. 

The exchange denied the rumors that someone transferred nearly $40 million in BTC from OKEx to Binance after the withdrawals were suspended. The OKEx CEO Jay Hao also tried to calm down the community and assured that no on-chain outflows from OKEx took place. 

The trading platform promises to resume the digital asset withdrawals as soon as possible, citing the security requirements as the critical factor that is taken into consideration. However, the community is not convinced.