OKEx's lips remain sealed on its sudden crypto withdrawal freeze

For nearly a week, uncertainty as to why OKEx suddenly suspended its cryptocurrency withdrawals on Oct. 16 has lingered on.

With one of OKEx's three keyholders now in question, the exchange's multisignature authorization process cannot be fulfilled, thus locking up its withdrawal function.

Following reports of OKEx founder Mingxing Xu being under investigation by Chinese authorities, the price of Bitcoin subsequently dropped by around 3% within the span of less than half an hour.

It is worth noting that just hours before OKEx halted its withdrawal services, on-chain transaction monitoring platform Whale Alert noted several large transfers between OKEx and certain unknown wallet addresses.

Hao went on to highlight that except for withdrawals, all of OKEx's other services such as deposits, spot trading, derivatives and staking remain unaffected.

Understandable it may be that a company is not obliged to share any sensitive investigative data with its customers immediately following a sudden service suspension, customers are starting to feel that a little more clarity would be welcome, considering OKEx's withdrawal ban has been in place for over four days now.

Providing her thoughts on the matter, a spokeswoman for OKEx told Cointelegraph that due to certain unforeseeable circumstances, the company is "Unable to disclose the nature of its ongoing investigation." Much like Hao, she stated that despite any inconvenience caused, it's important for the company's customers to understand that the decision to suspend crypto withdrawals has been made to ensure a high standard of security.

Even though Bitcoin has continued to forge an impressive recovery after its 3% drop in price, it still stands to reason that the general sentiment of the crypto market may have been affected negatively by OKEx's situation along with what happened to crypto exchange platform BitMEX. Earlier this month, several federal agencies in the United States filed charges against BitMEX's top brass - Arthur Hayes, Samuel Reed and Ben Delo.

Elucidating his thoughts on the subject, Thor Chan, CEO of Hong Kong-based crypto exchange Aax, told Cointelegraph that despite these recent developments, the global crypto sector seems to have staved off bearish pressure reasonably well.

Lastly, from a legal standpoint, OKEx being based out of Malta, a member-country of the European Union, but headquartered in Hong Kong raises certain jurisdiction-related issues.