OKEx Holds $2.3 Billion Worth Of Bitcoin: On-Chain Data Report

OKex holds $2.3 billion worth of Bitcoin on the platform according to the researchers at Glassnode whose report we are reading in our latest crypto news.

In a public statement, Okex said that one of the people holding a private key to the exchange’s wallet is cooperating with the investors as the statement read:

 “One of our private key holders is currently cooperating with a public security bureau in investigations where required.  We have been out of touch with the concerned private key holder.  As such, the associated authorization could not be completed… We assure that OKEx’s other functions remain normal and stable and the security of your assets at OKEx will not affected.”

Since exchanges use cold wallets to process transactions which means OKEx cannot process withdrawals without the use of private key holders. The unexpected news spurred the BTC market because of the size of OKEx as an exchange as it remained one of the top exchanges on the market in both futures and spot trading. However, will the massive bitcoin reserves change the dynamic? OKEX holds $2.3 billion worth of BTC and this reserve was public for a long period. the CEO of the exchange Jay Hao reassured the investors that their funds are safe but the size of the reserve makes the situation complex in terms of impacting the market. Glassnode said:

 “According to our data, around 200,000 BTC (1.1% of the circulating #bitcoin supply) are currently held in #OKEx wallets. That is around $2.3 billion worth of $BTC stored in the exchange’s vaults.”

The crypto market will react differently to the private-key related issue at the minor exchange and to one of the leading trading platforms on the market. In a statement, Hao said that the user funds on the exchange remain safe but he noted that the investigation into private key holder pertains to personal issues and not to the exchange’s operations:

 “All operations @OKEx except digital asset/cryptocurrency withdrawals remain unaffected. All your funds and assets are safe. The investigation concerns a certain private key holder’s personal issue only. Further announcements will be made.”

#OKEX outflow became zero after suspending withdrawals. $BTC plunged sharply right after the OKEX's announcement. pic.twitter.com/Z0hSgpAl6s

— CryptoQuant.com (@cryptoquant_com) October 16, 2020

So far, the on-chain data from CryptoQuant found that the outflows were not spotted from the exchange which means that OKEx reserves are not moving and are still stored in the cold wallet. Based on the market pessimistic sentiment to the news, some industry executives suggest investors will get concerned that one person will impact the withdrawals on the exchange with $2.3 billion in reserves.