Xu Mingxing and OK face the biggest crisis: 5 clues and 2 uncertainties

OK and Xu Mingxing are facing the biggest crisis in their lives, and so are China's cryptocurrency exchanges. Huobi is busy refuting rumors, and everyone is even speculating on Li Lin's panic. Rumors are flying everywhere, so what is the truth about the "1016 incident" between OK and Xu Mingxing?

1: At 12:00, OKEx issued an announcement stating that some private key holders were cooperating with the public security authorities in the investigation and were currently out of contact, making it impossible to complete the authorization. The decision was made to suspend withdrawals. The withdrawal suspension time was changed from 15:00 to 12:00 and then to 11:00. Some withdrawal operations that had already been applied for were also cancelled.

2: At 12:45, OKEx CEO JAY posted on Weibo that the company, business, and platform operations were not affected, and that this was a personal issue of the private key manager, and that withdrawals would be temporarily suspended.

3: At 17:09, Caixin published an article, disclosing that the person cooperating with the investigation was OK founder Xu Mingxing, and had been taken away by the police at least a week ago.

At the same time, Lei Zhen, the former partner of OK, said in the WeChat group that it had nothing to do with blockchain, and that Lao Xu was cooperating with the investigation on other matters, and he also hoped to help him solve this problem as soon as possible.

At around 18:00, Bloomberg received a response from OKEx, saying that the investigation had nothing to do with money laundering or the exchange itself, and that all services would be restored as soon as possible.

At 19:42, Mars Finance reported that Xu Mingxing's being taken away by the police may have nothing to do with OKEx's digital asset trading services. At present, the two executives who were taken away with Xu Mingxing have been released on bail. The real reason why Xu Mingxing was taken away to assist in the investigation may be related to the backdoor listing of OKEx Group in Hong Kong last year. At that time , a sum of money for buying the shell was borrowed from an underground bank in Shanxi , and the bank has now been investigated by the police.

A screenshot circulated on the Internet in the afternoon, and Mars Finance, invested by OK Investment, also confirmed the news.

The above is a relatively reliable timeline of the "1016 incident". The information released so far is that Xu Mingxing's personal problems have nothing to do with OKEx. However, whether it is Bloomberg, Mars or related information, they are all released by OKEx on its own initiative. There is no third-party confirmation, and it is unknown whether there will be a reversal or new information in the future.

Wu said that the blockchain confirmed that the Shanxi police's information was confirmed. Another voice pointed to the involvement of OKEx's own OTC team, and of course a firewall may have been set up. OKEx has repeatedly denied that it is involved in the exchange and money laundering business, but the legal currency trading area of ​​OKEx has been completely cleared, and it is not like what JAY said that the business is not affected. Previously, OKEx merchants were chased across provinces by Shaanxi police for mistakenly receiving 500,000 black money, but at that time they did not hear that the exchange itself was involved in the case.

Refer to "Exclusive: Major OTC traders on mainstream platforms involved in Shaanxi's "pig killing case"

Another question that has emerged is that the OKEx private key is kept by Xu Mingxing personally. In theory, the exchange should adopt multi-signature and be kept by people in different regions, similar to the disaster preparedness mechanism of Internet companies' data. Huobi also spoke out in the media at the right time, saying that the cold wallet uses multiple and threshold signature technology and does not rely on the authority and operation of a single person.

Generally speaking, the police will proactively disclose cases of public concern, so subsequent public disclosure by the police is the most accurate. It is worth noting that this year the central bank is cracking down on money laundering. On May 9, the Shanghai People's Procuratorate issued the "2019 Shanghai Financial Procuratorate White Paper", which mentioned that the use of virtual currency and third-party illegal platforms for money laundering has increased, further increasing the difficulty of investigating and tracking criminal clues.

Reference: "Exclusive: China's central bank is stepping up its anti-money laundering efforts and is stepping up cryptocurrency regulation"

Since Xu Mingxing founded OKEx, although he encountered the 94 incident with the rights defenders, this seems to be the first time he has been formally investigated. OK is also one of the companies in the industry that attaches the most importance to government relations. Xu Mingxing not only left OKEx in name, but also no longer involved any cryptocurrency in public activities. He only talked about and supported the research of non-coin blockchain, and even said that he "dedicated" the company to the country. There are also so-called politicians and businessmen among the shareholders.

The following parts that can be paid attention to are: first, whether Xu Mingxing can complete the investigation within 37 days. According to Caixin, more than a week has passed, so the remaining month will be crucial. If there is no arrest within 37 days, it means that the procuratorate may have approved his arrest, which will take the "trouble" to a higher level. Second, if it is indeed Xu's personal problem, can OKEx operate stably under the leadership of the senior management team in the "Xu-free" situation and gradually allow withdrawals.

OKEx has also had some bright spots in its business this year, and is stabilizing its advantages and catching up, especially in the field of derivatives. We are still unable to confirm whether this is a personal problem or an industry crisis. When the nest is overturned, all the eggs will be intact. Industry insiders generally hope that the biggest crisis in the history of Xu Mingxing and OKEx will pass as soon as possible.