OKX Freezes $40K in Stablecoins After User Buys KYC Accounts — CEO Explains Why
OKX has come underneath public scrutiny after freezing $40,000 in stablecoins held in accounts bought from third events, a transfer the alternate says was essential to keep up compliance and person safety.
The incident, which drew consideration over the weekend, concerned a longtime person often known as Captain Bunny, who bought 4 KYC-verified accounts from different areas in 2023 to take part in OKX’s Jumpstart occasions, which had been unavailable to customers in mainland China.
Identity Rules Over On-Chain Records in OKX Account Freeze Case
The person famous that these accounts remained idle for 2 years, with no different exercise apart from his transfers of USDG from his most important account.
The funds had been meant to earn yield by means of a promotion providing 10% annual curiosity, and the person described the frozen belongings as essential for protecting a member of the family’s pressing medical bills.
In an in depth put up on X, Captain Bunny recounted his historical past with OKX, relationship again to the platform’s early days as OKCoin in 2014. He emphasised his loyalty, explaining that he had constantly trusted the platform by means of a number of bull and bear markets.
He described transferring $10,000 USDG at a time from his most important account into the 4 bought accounts in late 2025, solely to seek out them frozen when he tried to withdraw the funds.
The person supplied on-chain switch data, electronic mail correspondence, and different proofs of account management to assist his declare and appealed for the platform to think about his scenario sympathetically, noting the urgency of a member of the family’s medical wants.
OKX founder and CEO Star Xu responded on to the scenario, defending the alternate’s insurance policies. Xu emphasised that account possession is set by registered identification data, not private statements or social media posts.
He defined that permitting entry to an account primarily based on a secondary occasion’s declare, even one backed by on-chain transaction data, would compromise person asset safety and violate regulatory obligations, together with anti-money laundering and anti-fraud measures.
Xu added that the accounts concerned in shopping for and promoting habits set off danger management mechanisms similar to facial recognition and identification verification, and funds can solely be launched if the registered account holder explicitly disclaims possession, no authorized restrictions are current, and the claimant can present verifiable proof of fund sources.
Buying KYC Accounts? OKX Says Not on Its Watch
OKX’s assist desk bolstered this stance, stating that the platform’s companies are completely for the real-name verified particular person related to every account.
The alternate referenced Section 4.6 of its phrases of use, noting that customers have to be the authorized and useful proprietor of any digital belongings on the platform and can’t act as an agent for one more occasion.
The person enchantment was emotional, however the platform argued that there have been no exceptions, and the scenario issues the bigger context of KYC in crypto.
The introduction of backdoors to further use of the accounts would put the integrity of the platforms and regulatory obligations in danger, establishing the opportunity of fraud and abuse.
The CEO identified that such obligations can’t be defeated by social media strain or some other enchantment by the plenty.
The occasion has led to a broader debate in the crypto group concerning the risks of shopping for third-party KYC accounts. The publicly voiced assist of the insurance policies of OKX by many buyers was primarily based on the need to maintain the verification of identification and potential abuse prevention.
One person observed that these backdoors is likely to be tempting to commit fraud and disrupt the safety of the platform, which highlights the problem of the exchanges in reconciling the wants of the customers with the necessities of compliance.
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