Bitcoin exodus: OKEx users move crypto off exchange as withdrawals resume

 After a five-week-long suspension of all user withdrawals, cryptocurrency exchange OKEx  resumed normal services at 8:00 am UTC on Nov. 26.

Having announced the re-opening last week, OKEx then indicated it would be launching a compensation and rewards program to express its gratitude to customers for holding out during the disruption. 

These programs include commission rebate cards denominated in Tether (USDT), a one-time compensation payment based on users’ asset and transaction histories, and a doubling of the asset weight calculation for holders of the exchange’s native token, OKB.

Despite these efforts, today’s data shows that the programs have not been enough to forestall users from withdrawing their funds, having apparently lost confidence in the exchange.

While withdrawals have not been open for long, some telling initial data is emerging on social media transaction trackers. Mason Jang, the chief operating officer of Crypto Quant, tweeted:

#OKEx stats - OKex BTC Reserve: 101,686 => 98,821 BTC- 2,822 BTC outflows has been occurred- 446 BTC moved to #Binance- 54 Accounts withdrew their $BTC Source: https://t.co/tAPwJdhpw4 pic.twitter.com/dkWOsQh8ZZ

— Mason Jang (@mason_jang) November 26, 2020

More data from CryptoQuant shows that “the first OKEx outflow after the withdrawal opening hit 2,822 BTC by the block time frame,” which is “the year-high in the block time frame”:

Crypto tracking service Whale Alert also traced at least a couple of high-value transactions within an hour of withdrawals opening:

198,467 #OKB (1,033,580 USD) transferred from #OKEx to #FTXTx: https://t.co/yW7WeHlLaU

— Whale Alert (@whale_alert) November 26, 2020

As reported, OKEx had suspended withdrawals on Oct. 16 while one of the holders of the exchange’s private keys cooperated with an investigation led by authorities and was therefore unable to authorize transactions within the hot wallet system. 

The exchange has maintained it was not involved in any illegal activities, although there have been reports that its founder, Star Xu, had been questioned by police that same week.

The sudden withdrawal suspension in mid-October caused significant volatility in the markets at the time, prompting a dip of 3% in Bitcoin’s (BTC) trading price. 

With outflows continuing from the exchange to other exchanges and wallets, bearish sentiment is circling in the market. BTC/USD has just lost support at $17,000, reporting its largest losses since March.