Xu Mingxing is out, and the "Bean Holder" is saved

After a long wait of nearly 35 days, the black swan incident of OKEx finally came to a conclusion.

This evening, OKEx issued an announcement stating that after the withdrawal function of the OKEx platform was suspended for a period of time, the problem has been resolved, the relevant personnel have returned to work, and the platform will open free withdrawals before November 27, 2020.

The announcement also pointed out that OKEx will conduct strict security checks before opening withdrawals, restore the safe and stable operation of the hot wallet system, insist on 100% reserves, and prevent bank runs.

"The Bean Holder is finally saved."

1.Xu Mingxing came out

Xu Mingxing is out, and everyone’s “Happy Beans” in OKEx are saved!

An announcement from OKEx finally put users’ minds at ease after more than 30 days of worry.

In fact, earlier today, Deepchain Finance learned from multiple sources that Xu Mingxing has been granted a certain degree of freedom and OKEx will issue a relevant announcement.

At 3:47 p.m., JayHao of OKEx also posted on Weibo that an announcement would be made soon, and everyone could rest assured that OKEx had 100% reserves.

OKEx CEO's Weibo content

Immediately afterwards, at 6:30 p.m., OKEx released the "OKEx Announcement on the Opening of Withdrawal Functions and Other Related Matters", officially announcing that the news that Xu Mingxing had regained his freedom was true.

OKEx Open Withdrawal Announcement

Influenced by this announcement, OKEx users who had been lurking in various communities began to talk and laugh.

After all, OKB has risen from 4 US dollars to 5.7 US dollars today; OKU (USDT in the OKEx OTC trading area) has also risen from 5 yuan to 6.24 yuan today.

The laughter and joy now contrast sharply with the silence before.

More than a month ago, the news that Xu Mingxing was taken away by the police for investigation spread like wildfire, the market was in panic, and OKB showed a downward trend.

At noon on October 16, OKEx issued a "Notice on Suspending Withdrawals", stating that some of the company's private key holders are cooperating with the public security authorities in the investigation and are currently out of contact, making it impossible to complete the authorization. Therefore, starting at 11:00 on October 16, 2020 (Hong Kong time), OKEx decided to suspend users' withdrawals.

OKB K-line chart for the past month

OKEx's announcement of just a few hundred words immediately caused panic in the market. OKB fell sharply, from its highest point of the day at $5.96 to $4.8, a drop of 11.26%, and then fell to $4.05 at one point.

As a leading exchange, how could such a thing happen to OKEx? The cryptocurrency industry was in a state of panic, and the entire market fell sharply as a result.

In panic, users began to transfer funds to their own wallets, and the number of users of decentralized exchanges represented by Uniswap surged during this period.

After OKEx announced the suspension of user withdrawals, fiat currency transactions were still available. This was the last chance to escape.

As a result, tens of thousands of users began to cash out from the fiat currency trading market, and thousands of people were trying to squeeze into the single-plank bridge.

However, there is only one bridge, but there are countless people who want to escape.

As a result of the bank run, the number of merchants and orders for fiat currency transactions soon began to decrease, and the over-the-counter purchase price became lower and lower.

Finally, if OKEx users want to escape unscathed, they can only sell their shares at a price about 20% lower than the market price.

Nevertheless, for users, being able to cut losses and exit the market may not necessarily be a bad thing.

Because the fiat currency trading channel did not last long before it was removed from the shelves by OKEx.

Users who have already escaped are secretly rejoicing, while more users trapped in the OKEx "siege" can only sigh and watch their coins disappear.

Some users try to find joy in the midst of adversity and compare OKU to happy beans.

What's more, some people joked that when Xu Mingxing was outside, everyone wanted him to go in, and when Xu Mingxing went in, everyone wanted him to come back.

In 2014, Xu Mingxing said: "We used to think that the hardest thing to buy with money is love, but now it seems that the hardest thing to buy with money is Bitcoin."

Perhaps for OKEx users, at that moment, the hardest thing in the world to buy with money was not Bitcoin, but a way to survive.

2. 35 Days of Terror: On Weibo Hot Search, Sneak Attacked by Sun Ge

The sudden incident at OKEx not only attracted widespread attention in the cryptocurrency field, but also showed signs of "going out of the circle".

On October 16, the day the announcement was released, the word "Xu Mingxing" was on the hot search list on Weibo , with more than 140,000 topics and ranked 44th on the hot search list. As more and more people joined in, the hot search even rose to 20th place.

However, despite everyone's concern, OKEx did not provide further explanation on the specific reasons for this matter, and "when to withdraw the money" is also an unknown, which has led to various speculations and concerns.

Anxious users, worried that OKEx would be caught in the same “Mentougou Incident” and not be able to get their funds back, began to think of various ways to leave the market.

At this time, a group of speculators who resold OKU to make a profit were born. Because OKEx can also conduct internal transfers, many communities began to appear advertisements for buying USDT in OKEx at low prices. Users who were anxious to exit chose to use this method to cash out and leave.

Wherever there is a hot spot, there is Justin Sun. On October 20, Justin Sun stated that in order to protect the asset security of TRON coin holders, he announced that TRX in OKEx would be given a 1:1 unlimited redemption and withdrawal, and provided a specific operation tutorial.

Soon, some users transferred their assets in OKEx without any loss in this way.

Regarding Sun Yuchen’s move, perhaps after he comes out, Xu Mingxing will not be able to help but curse: young people have no martial ethics and are launching sneak attacks!

Risk warning released by OKEx Weibo

In response to Sun Ge’s poaching, OKEx quickly issued a risk warning. In addition to worrying about the safety of user funds, the more important thing is that they are worried that the funds within OKEx may be transferred, so they restricted the internal transfer function.

Subsequently, OKEx reopened fiat currency trading, but at this time the price of USDT on OKEx was still 20% lower than the market price, so users still had to sell at a discount if they wanted to leave.

However, users can deposit and withdraw funds through legal currency, which gives users some comfort to some extent. OKB also quickly rose by 8% and successfully returned to $5.

On November 1, in response to various questions from users about withdrawing money, OKEx's Xu Kun said that users' funds are safe, but the withdrawal time is still uncertain.

OKEx releases follow-up progress on suspension of withdrawal function

On November 16, OKEx released the "OKEx Announcement on the Progress of Related Events after the Suspension of Withdrawal Function". This announcement brought a key piece of information: the external legal advisor hired by OKEx has contacted the private key manager.

Although it is still unknown when Xu Mingxing will come out and when withdrawals will be allowed, this news reveals to some extent that the situation is developing in a favorable direction.

OKB K-line chart

Finally, after 35 days, everything came to a conclusion and the market responded appropriately.

3. OKEx’s difficulties

Although Xu Mingxing has come out, there is hope for withdrawing coins, but there are still problems that need to be answered and solved.

First of all, there is still no clear explanation as to the reason why Xu Mingxing was investigated.

The reason for the investigation is related to investors, the OKEx platform and even domestic cryptocurrency regulation issues, and everyone is still confused until now.

There are several speculations on the market:

1. Money Laundering

Cryptocurrency has always been closely related to money laundering, and the crackdown on money laundering in China has become increasingly severe in the past two years. Therefore, many people speculate that Xu Mingxing’s investigation involves cross-border money laundering.

2. Backdoor listing issues

In addition to the money laundering theory, there are also reports that the real reason why Xu Mingxing was taken away to assist in the investigation is related to the backdoor listing of the OK Group in Hong Kong last year. At that time, a sum of money for the shell purchase was borrowed from an underground bank in Shanxi. Currently, this bank has been investigated by the police. It is possible that there is a problem with the funds of this bank, involving Xu Mingxing.

3. Suspected of concealing or hiding criminal proceeds

In addition, on November 3, Beijing News Beike Finance quoted sources as saying that the reason Xu Mingxing was taken away by Luliang police for investigation was because he was suspected of covering up and concealing the proceeds of crime.

However, all of the above are just speculations. There is still no definite answer as to why Xu Mingxing was investigated.

For OKEx and Xu Mingxing, there are more important issues to be resolved right now than answering users' questions.

The first is the risk of bank runs after the withdrawal of coins is allowed; the second is the issue of retaining customers and how to regain their trust.

Regarding the issue of bank runs, users whose funds have been trapped in OKEx will inevitably transfer their funds to safer exchanges or their own wallets as soon as withdrawals are allowed. In fact, many investors told Deepchain Finance that they dare not keep their money in OKEx anymore.

Regarding the issue of redemption, OKEx CEO JayHao also made it clear on Weibo that there is 100% reserve and there will be no run. He also said that strict security checks will be carried out to restore the safe and stable operation of the hot wallet system and ensure the safety of user funds.

If bank runs are not a problem, then the only issue left is retaining customers.

Competition between exchanges has always been fierce. After this incident, it will be a difficult problem for OKEx to retain users and regain their trust. OKEx currently says that it will launch a large-scale feedback campaign for new and old customers to express its deep apologies to users in this short period of time.

But can the reward campaign really save users who have been worried for more than a month and suffered asset losses? Perhaps there is a big question mark.

Xu Mingxing’s release is just the beginning. The problems that OKEx will face next may not be easy.

But fortunately, Xu Mingxing has come out.