The bitcoin exchange OKEx has suspended cryptocurrency withdrawals on the platform after its Chinese founder was taken away by police.
OKEx founder Xu Mingxing was taken at least a week ago and hasn't appeared in a work-related social media group recently, according to a person close to the company. It's not clear what the investigation is about. There have been signs of a renewed crackdown on money-laundering activities on over-the-counter (OTC) trading platforms of cryptocurrencies.
The suspension of withdrawals was because one of the exchange's private key holders is cooperating with the public security bureau in an ongoing investigation, OKEx said in a statement. Two persons close to OKEx told Caixin that the key holder is Xu, a tycoon who has a hands-on management style for the company's finances, one of two persons said.
A private key is a sophisticated form of cryptography that allows a user to access his or her cryptocurrency. When dealing with cryptocurrency, a user is usually given both a public key and a private key to send and receive coins, but he or she won't be able to withdraw them without the unique private key.
The exchange said it has been "out of touch" with the key holder, preventing authorization of transactions. The security of customer assets "will not be affected" by the event, the exchange said.
OKEx CEO Jay Hao said on Sina Weibo that the decision to temporarily suspend withdrawals was due to personal issues of the private key holder.