The crypto industry has been experiencing another unexpected development for the last few hours that shocked the entire market and drove the price of Bitcoin down.
Pressure on Bitcoin’s sales side recently began to mount after it was revealed that OKEx was unable to process withdrawals as its founder was arrested by Chinese authorities.
He is the sole holder of the keys required to process withdrawal requests – they must be entered regularly so that withdrawals can continue to be processed as planned.
His arrest has raised questions about why the Exchange structured their multi-sig withdrawal system so that there is a single point of failure – and plays into the hands of those who believe decentralized exchanges are superior to centralized ones.
Interestingly, Glassnode’s data also shows that significant amounts of BTC were moved off the platform in the 48 hours prior to the withdrawal of the withdrawals.
OKEx debacle is also causing trouble for Bitcoin
For reasons that are still unknown, a Chinese police investigation is dealing with the popular crypto exchange – with the founder in particular falling into the crosshairs.
As before, no one knows when the founder was arrested, but it appears that an abundance of bitcoins was hastily withdrawn from the exchange in the 48 hours prior to the recent suspension.
Analysis platform Glassnode wrote about it in a tweet and commented that a total of $ 113 million was withdrawn in two large batches – just before the withdrawals were suspended.
“Prior to the suspension of cryptocurrency withdrawals at OKEx, we observed large BTC outflows from the exchange. According to our data, a total of 10,000 BTC (~ $ 113 million) have been withdrawn in two large batches in the past 48 hours. “
The arrest of the OKEx founder reveals serious centralization errors
Commenting on this recent mess, Dovey Wan, founding partner of Primitive Crypto, says: It seems strange to her that a large crypto exchange containing Bitcoin and other digital assets valued at billions should have such a single point of failure.
“Something is strange. If multi-sig, how is it that the police have the majority of the signatories in custody at once? Usually the signers are spread over different geo-locations to avoid such a case, I suppose? It is difficult to imagine how such a single point of failure can come about. “
It looks like there is more to this story that has yet to be revealed – but meanwhile, over 200,000 bitcoins – as well as tons of other digital assets – all remain in the air.