OKEx founder seeks police protection from irate investors protesting botched app
OKEx is currently facing bitter investors who saw their investments diminish due to the exchange’s app failing during a particularly bearish trading session. Mingxing Xu, founder of OKEx and its parent company OKCoin, was forced to seek police protection from disgruntled users of the platform.
In a video circulating on WeChat, Xu was shown speaking to the police in Shanghai about how seven-eight people had surrounded him at a hotel where he was staying and demanded a refund of the losses they incurred.
In order to protect himself from these investors, he was forced to leave the hotel and approach the Weifangxincun police station.
The video showed the police replying to his statements, saying that the issue does not qualify as a criminal offence and that Xu can file a civil lawsuit in response to these problems.
However, Xu made it very clear that the exchange would not pay a single penny to the investors who incurred losses.
It has been confirmed by sources that the police will investigate the complaint raised by the investors.
So what caused the app to crash?
Last week, the crypto market was plagued with intense selling pressures which led to the decline of many major altcoins’ prices.
On Wednesday, the Hong Kong-based exchange’s mobile app had crashed when the broader market was posting losses. Because of this, investors were not able to protect themselves from the bearish market, resulting in them incurring major losses from their investments.
According to a report circulating on WeChat, OKEx had said that the reason behind the short-term suspension was the large influx of users on the platform as a result of the market’s volatility.
The sharp rise in traffic led to a slowdown in the OKEx app, leading to an eventual suspension.
According to conversations circulating on messaging app WeChat, the brief shutdown of the app led to users losing as much as $10 million. Many have speculated that the shutdown was deliberately carried out by the trading platform.
OKEx subject to many controversies
Interestingly, this is not the first instance that the app of OKEx suddenly shut down. Earlier, the exchange’s officials have been plagued with dissatisfied investors harassing their family members, even going to the extent of threatening suicide by consuming pesticide or jumping off the OKCoin office building.
OKEx has been repeatedly called out for allegedly manipulating the market by deleting transaction data, pulling the network cable on its app and other such malicious acts.
In July, an unidentified trader took up a position of a whopping 4.16 million Bitcoin futures listed on the exchange. The position, valued at around $416 million, set off the risk management system at OKEx, which led to futures traders giving up about 18 per cent of their profits, as calculated by Bloomberg.
In March, panic ensued among investors at the exchange when Bitcoin’s price appeared to drop below $4,800, while the actual price of the coin was around $7,000. On investigation, OKEx uncovered a clear price manipulation, because of which they rolled back all futures transactions to the point before the manipulation began.
The fresh allegations will likely dent the exchange’s reputation further and force investors to move their funds elsewhere.
Image via Shutterstock
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