© 2022 The Block Crypto, Inc. All rights reserved. This article is published for informational purposes only. It is not offered or intended to provide legal, tax, financial, other or legal, tax, financial advice. The China National Radio‘s (CNR) “Voice of China” program claimed that the OKEx crypto exchange was illegally working with Chinese customers in China, CNR reported on Thursday (May 3rd). Chinese crypto exchanges were banned by the government last fall. One in a series of reports on the revelation of cryptographic secrets by China National Radio claimed that the OKEx crypto exchange was operating illegally in China. This has certainly been on the radar of Chinese officials for a long time. In 2018, Pan Gongsheng, vice president of the People‘s Bank of China, warned that cryptocurrency exchanges based overseas but soliciting businesses from people in China are still illegal. Ten agencies, including the central bank, financial authorities, securities and foreign exchange regulators, have pledged to work together to eradicate “illegal” cryptocurrency activities, the first time Beijing-based regulators have joined forces to explicitly ban all cryptocurrency-related activities.
OKG Technology, a Hong Kong-listed company controlled by OKEx founder Xu Mingxing, said on Oct. 18 that it had been informed by its lawyer that Xu was “currently under investigation by Chinese police” and that the company could not reach Xu directly to confirm this information. In September 2017, China declared initial coin offerings (ICOs) illegal and banned their issuance on the mainland. In response, many cryptocurrency exchanges – including Binance – have decided to venture into greener regulatory pastures. OKex is listed on the CoinMarketCap.com as one of the largest international cryptocurrency exchanges in the world, claiming a daily turnover of $1.5 billion through its Bitcoin futures trading product alone. However, with other leading Chinese cryptocurrency exchanges, doubts have recently been raised as to whether the actual sales figures are as high as in the allegations of exaggeration and manipulation. A private key is a sophisticated form of cryptography that allows a user to access their cryptocurrency. When it comes to cryptocurrency, a user usually receives both a public key and a private key to send and receive coins, but they cannot withdraw them without the unique private key. A buyer can then transfer Chinese yuan to an OTC merchant via AliPay, WeChat Pay, or bank transfer, for example, and then OKEx credits the newly purchased crypto to the buyer‘s account as an internal transfer that doesn‘t require on-chain transactions. Similarly, users can also terminate each other‘s assets directly via off-chain internal transfers, as long as they have each other‘s unique identifier on the exchange. In addition, financial institutions must identify the capital accounts of digital currency exchanges and OTC traders and disrupt cryptocurrency payment flows for these accounts.
Founded in 2014 by Star XU, Belize-based OKex is a cryptocurrency and digital asset exchange that divides opinions. The company, whose operations are based in Hong Kong, enjoys significant support. Originally based in China, the exchange and its sister OKCoin moved to Hong Kong after the Chinese government banned ICO token trading and are now internationally oriented. Among the impressive investors on the exchange is VenturesLab, co-founded by Tim Draper, a well-known American venture capitalist and cryptocurrency advocate who has made a number of successful seed investments in companies such as Hotmail, Tesla, and Baidu. The OKex exchange offers the most commonly used standard crypto-to-crypto trading for cryptocurrency exchanges as well as fiat-crypto-to-crypto trading. At present, unfortunately, the Chinese yuan is the only supported fiat currency. The exchange supports over a hundred cryptocurrencies and tokens with the regular addition of new options. Just days after the Chinese government promised to crack down on bitcoin mining and trading, cryptocurrency exchanges Huobi and OKEx began preventing Chinese customers from accessing some of their services. The move also hit cryptocurrency and blockchain-related stocks, though they recovered some of those declines in U.S. morning trading. While this can be expected to change in the not-too-distant future, the fact that CNY is the only fiat currency supported on the platform means that OKex is still very much geared towards the Chinese market.
Here‘s everything you missed about these stories, and more in this week‘s edition of OKX Insights‘ China Market Watch. OKex also offers futures contracts for Bitcoin, Ethereum and EOS with weekly, bi-weekly and monthly contracts. Leveraged margin trading is also available for futures. Two people close to OKEx told Caixin that Xu had been in police custody for at least a week and had not worked since. As Caixin reported on October 16, OKEx founder Star Xu was taken for questioning. Shortly after, the company issued an announcement stating that withdrawals of crypto assets on its platform had been suspended. Chinese regulators stepped up the crackdown on cryptocurrencies last month with a blanket ban on all crypto transactions and mining, resulting in the disruption of crypto exchanges and service providers with customers in mainland China. See related article: Conflux‘s Open DeFi Project Aims to Connect East and West – With Its Own Cryptocurrency in China Other investors include major Chinese VCs such as Ceyuan Ventures, Longling Capital and Giant Network Group. In Beijing, the Industrial and Commercial Bank of China enabled direct conversion between the Chinese yuan and the country‘s digital currency, DCEP, through more than 3,000 ATMs. The spokesperson added that Huobi Pool, the company‘s mining pool service, has prevented Chinese customers from buying and stockpiling miners. The restrictions are intended to “focus on expanding our presence abroad.” It‘s been almost a month since OKEx, one of the world‘s largest cryptocurrency exchanges, suspended its token payment services for its customers after its founder – Star Xu – was arrested by police for no apparent reason.