An exchange suspended withdrawals for 10 days. What happened?

Today is the 10th day since OKex suspended withdrawals. In the past 10 days, the cryptocurrency circle has staged a series of "tragedies and comedies" surrounding OKEx and "OKU".

What happened at OKEx? Let’s first review some of the landmark events in the past 10 days.

1. At noon on October 16, OKEx announced that some private key holders were cooperating with the public security authorities in the investigation and were out of contact and unable to complete the authorization. Users were suspended from withdrawing money, but other functions were normal. Soon, OKEx also closed the fiat currency withdrawal function.

Caixin reported that the person taken away by the police was Xu Mingxing, the founder of OKEx. Afterwards, some OKEx users worried that their assets could not be cashed out and began to sell OKU at a discount. For example, A transferred 10,000 OKU to B via the OKEx platform transfer method, and B transferred 80% of the legal currency to A, or 80% of the USDT on other platforms.

"What happened to Xu Mingxing?" has become a common topic of discussion in the entire cryptocurrency world. Some people joked : Never before have we cared so much about the fate of a "star" and his WeChat exercise steps as we do now.

2. On October 20, Coinex launched OKU. One OKU represents one USDT held by the OKEx platform and supports USDT transactions. This provides a relatively official channel for the crazy OKU buying and selling. OKEx users transferred to Coinex.

But soon, Coinex's internal transfer account on the OKEx platform was blocked. Coinex's behavior was imitated by many small exchanges.

3. At midnight on October 20, the TRON Foundation announced that it would provide a rigid 1:1 unlimited redemption and withdrawal for TRX on the OKEx platform. That is, OKEx users can transfer TRX to the OKEx account designated by TRON, and TRON will then transfer the equivalent TRX to the user's TRON mainnet address. TRX on the OKEx platform rose by more than 20% and then plummeted back to its original price. During this period, both TRON accounts were quickly blocked by OKEx.

On the 22nd, TRON suspended the plan, and a total of 20 people and 11 million TRX completed the transfer. Some people teased that your Sun Ge will always be your Sun Ge, and you have to obey him.

4. On October 21, OKEx resumed fiat currency trading. On the same day, OKEx also launched the new currency LMCH. This gave the market a lot of confidence, but soon, the soaring OKB and OKU fell again.

At present, with the rise in Bitcoin prices, people seem to have forgotten the OKEx incident, but it is always like a bomb, affecting the emotions and judgment of traders on the floor.

Today, there are a lot of rumors about Xu Mingxing, but we will not analyze them. Instead, we will think about the following topics.

Panic is contagious. Have you sold your "OKU"?

After OKEx suspended withdrawals, Bitcoin fell 1.98%. But who would have thought that in the past 10 days, Bitcoin has risen from $11,100 to $13,350. But OKB was not so lucky, plummeting to $4.6, and OKEx's USDT also fell into a slump. Today's price is only $5.19, with a price difference of $1.3 from Huobi's USDT. Have you bought the discounted version of "OUK" on OKEx?

At first, those who sold "OKU" at a discount were from institutions. These people had to transfer funds in order to obtain liquidity, but as things developed, more ordinary people began to fear that there would be problems with OKEx and OKU would return to zero, so they panicked and dumped the market.

Tony Li, a Weibo celebrity, is probably the most popular guarantor. Through him, many OKEx users transfer their OKU to buyers through internal transfer. Buyers pay Binance, Huobi’s OKU, or RMB. He buys at 5.7 and sells at 5.8, and he charges a commission of 0.1.

In the panic, various OTC OKU trading groups were established. Someone in one trading group said: It is best not to withdraw cash for half a year, as you will make a fortune.

Those who bought USDT at a low price firmly believed that OKEx would always allow withdrawals, and that it would be a waste not to make a profit of more than 20%. For example, if you bought USDT and then used it to buy Bitcoin, it would be equivalent to a direct discount.

Are the panicked ones stupid or the calm ones stupid? There is really no answer. It all comes down to a question of risk preference. Previously, Tether was in a repayment crisis and USDT plummeted, but in the end nothing happened and everyone who borrowed USDT at a low price made money.

The words of Xiong Yue, director of the Bixin Research Institute, are worth pondering. He said, "People with a low risk preference often look like fools, but in the dangerous cryptocurrency world, year after year, it seems that only such people survive."

▲OKEx OTC USDT, then buy Bitcoin, which is equivalent to a discount

Information asymmetry exists everywhere, and it may be especially prevalent in the cryptocurrency world.

The knowledge system and amount of information required to engage in the cryptocurrency industry is far greater than any other industry. The speed of industry cycle changes and hot spots rotation is also much faster than any other industry.

This means that investing in cryptocurrency is an extreme test of everyone's learning ability, research ability, and judgment ability. Becoming an expert, having more information advantages than others, can better discover value depressions and obtain excess returns.

No matter you are a technical, trend, personality, or trend follower, you still have to learn to distinguish the value of the mixed projects. Moreover, valuable projects may collapse several times. Moreover, the cycle of collapse is getting faster and faster.

In the "OK incident", Master Li Tony was very emotional. He said: "From the leeks I have come into contact with in the past few days, a quarter of them don't know how to withdraw money or transfer money, and they don't even know what the USDT network is, and they don't know the difference between TRC and ERC. Alas."

It is no wonder that Master Li Tony reminds his fans every day not to sell OKU at too low a price. In his opinion, even if it is 94, user assets can be liquidated and they will definitely be able to withdraw the coins in the end. It is just a matter of time.

Real qualified investors have always been a rare species in the cryptocurrency world. In the cryptocurrency world, many people lose money all year round, especially in the bull market. To a large extent, they just chase the rise and fall, have no information mining ability, and believe everything they hear.

It is no wonder that some people say that if you have not bought zero-return coins, you have never been in the cryptocurrency circle. There is always a lack of Fomo and panic here.

▲Discounted OKEx OTC USDT

Is China's influence weakening? Is the crypto world immune to "single point failure"?

Ten days have passed since the OKEx incident, and Bitcoin has not only not fallen, but has ushered in a highlight moment. Data shows that more than 90% of Bitcoin addresses have made profits.

However, China’s policies and sentiment today are not friendly to the cryptocurrency market. In addition to OKEx’s suspension of withdrawals and frequent OTC card freezes, the central bank has also clearly prohibited any unit or individual from producing and selling digital tokens to replace the circulation of RMB in the market.

Therefore, many people don’t understand why Bitcoin has risen in price.

Recalling the 94 incident, the central bank and seven other ministries and commissions issued a document declaring that ICO was an illegal public financing behavior and should be stopped immediately. As soon as the announcement came out at 3 pm, most currencies fell by more than 50% in one day, with the highest drop exceeding 90%. China's policies have greatly affected the global cryptocurrency market. But this time, everything seems "not powerful enough."

“This shows that Chinese retail investors no longer have much bitcoin in their hands. Bitcoin is an index asset in this market. If the price of Bitcoin stabilizes, everything will stabilize,” said Wan Hui, a famous Weibo user.

Going back five years, when liquidity was highly concentrated, a single large exchange had a huge impact. For example, when many people recall the Mentougou incident, they still feel the fear of being dominated by the exchange.

But today, no matter whether it is the single point failure of OKEx or the overseas exchange Bitmex, it has not caused jealous panic and collapse of the market. Is it true that with the wider adoption of Bitcoin and the entry of institutions such as Grayscale Investments and PayPal, it is really more robust than it was three years ago?

Not your key, Not your coin

The OKEx incident is still fermenting, with unfounded information and speculation flying all over the place. OKU is still hovering at a low level, and the fear of being unable to withdraw assets has not disappeared.

Many people believe that in order to protect personal assets, a licensed and regulated investment platform is indispensable, such as Coinbase for spot trading, CME and Bakkt for derivatives trading, etc.

More people believe that it is truly safe to hold their own private keys, such as keeping coins in a wallet or using a decentralized exchange (DEX). Therefore, the OKEx incident has turned the industry into a blessing in disguise, becoming a round of advertisements for decentralized exchanges, DeFi, and the coin withdrawal movement.

It has to be said that although the core logic of cryptocurrency is to control one's own private keys, judging from the fact that the so-called "old leeks" generally missed out on this round of DeFi wave, there are not many people who really understand how to control their own private keys, which is actually quite embarrassing.

A community that advocates the concept of decentralization has always lived in a centralized world. But as people gradually move to DEX, this is likely to be the first step for individuals to master their private keys.

The story of Bitcoin once touched me, but what really made me realize that the world can exist in another way is DEX. Uniswap and DeFi-related liquidity mining gameplay are believed to be the first time for many people to use private keys for on-chain operations. The experience of moving assets in this decentralized form is very impactful.

OKEx's suspension of withdrawals may become an opportunity for the public to enter the decentralized world, which is actually a good thing, even if it is just a small step towards DEX.

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