AWOL Founder Controls Single-sig OKEx Bitcoin Wallet: Report

Chinese blockchain news site Jinse Caijing is reporting that the Bitcoin cold wallet for cryptocurrency exchange OKEx is single-signature, with founder Xu Mingxing holding the private key. 

That is problematic for OKEx users, given that Xu was “taken away by police” in China several weeks ago. As a result, on October 16, OKEx said it had halted withdrawals, which continue to be unavailable.

Chinese blockchain media reporting that OKEx bitcoin cold wallet is in fact single signature “oops” pic.twitter.com/rM0IY5o3Ed

— Matthew Graham (@mattysino) October 28, 2020

In a statement at that time, the company explained, “One of our private key holders [presumably Xu] 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.”

Jinse Caijing’s reporting cites people close to senior management. Assuming its reporting is accurate, Xu is either the only key holder for the exchange’s Bitcoin wallet or the exchange is sharing one private key among its staff rather than use a multi-sig wallet or other solution.

That’s the equivalent of sharing one’s Netflix password, but with more at stake than someone seeing your browsing history. Glassnode estimates that OKEx holds 200,000 Bitcoin (worth roughly $2.65 billion today) in its vaults.

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. https://t.co/xfOmlZyWbY pic.twitter.com/g2roJgFxNP

— glassnode (@glassnode) October 16, 2020

Xu has been linked to a money laundering investigation, though OKEx denied that his visit with police was related to that. In 2018, Xu faced fraud accusations but was not charged.

An OKEx spokesperson did not respond to a request for comment.

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