OKX’s founder and CEO, Star Xu, has publicly defended the exchange’s asset-freezing policy after a user accused the platform of locking up approximately $40,000 in stablecoins due to issues with account verification. The user, identified on social media as Captain Bunny, revealed in a post that his funds in Global Dollar (USDG) were frozen after risk controls were triggered across four accounts.
The situation arose after the user admitted that the accounts were purchased in late 2023 and were registered under names that were not his own—a strategy often employed to circumvent restrictions that affect users in mainland China. The freezing of the assets has placed a significant burden on the user, who stated that the funds were intended for medical expenses related to his elderly father.
Per the user’s account, the platform’s security measures subsequently required facial recognition to access these accounts. However, due to the accounts being registered under different identities, the user was unable to complete the necessary verification process, thereby locking him out of his funds.
In response, Xu addressed the incident in a statement on social media, emphasizing the importance of user asset security and the responsibilities of the platform. He characterized the practice of transferring control of accounts to individuals other than the verified holders as a serious neglect of duty. “OKX requires all users to use the platform with real-name verification. Account buying and selling explicitly violates the OKX platform service agreement,” Xu wrote.
Although the purchasing of verified accounts exists within a legal gray area, Xu indicated that the platform might still be able to assist the user in retrieving his assets if specific criteria are met. These conditions include:
1. Individuals who sold the KYC-compliant account must formally disclaim ownership of the funds.
2. The accounts must not be subject to any judicial freezes or law enforcement investigations.
3. There must be verifiable proof regarding the sources of funds that comply with regulatory standards.
The implementation of Know Your Customer (KYC) requirements by cryptocurrency exchanges aims to comply with Anti-Money Laundering (AML) and counter-terrorism financing (CTF) regulations, ensuring both legal operation and user safety. New users typically have to provide personal information and complete verification through documentation and a selfie before they can begin trading.
OKX’s support team reiterated that their services are available only for individuals who have completed KYC under their true identities. They noted in a response to Captain Bunny that “the platform service is only for the account’s real-name verified individual,” referencing the user’s acknowledgment that the accounts were associated with someone else’s name.
Many in the cryptocurrency community expressed support for the exchange’s policies, recognizing the risks associated with allowing the type of account transfer described by Captain Bunny. One investor articulated the sentiment, stating, “Basically, no exchange will open this kind of backdoor; once they do, the consequences would be unimaginable! In the future, there will be people who specifically rely on this to commit fraud.”
A spokesperson for OKX declined to provide further comments beyond Xu’s public remarks on the incident, leaving open questions about the resolution for the affected user and the ongoing implications for account security practices in the cryptocurrency sector.
