OKX founder and CEO Star Zou defended the exchange’s asset-free policies after a user accused the platform of locking up $40,000 in stablecoins held in accounts purchased instead of being registered under the user’s own identity.
The user, who goes by the social media name Captain Bunny, said in an Xpost on Sunday that OKX had frozen about $40,000 worth of global dollar (USDG) stablecoins after triggering risk controls linked to four accounts. The customer said that the funds were needed to meet medical expenses for his elderly father.
The user admitted that the accounts were purchased in late 2023 and were originally verified under other people’s names, a practice commonly used to bypass restrictions on users in mainland China.
According to the user, OKX’s security system later required facial recognition to access accounts. Because the accounts were verified under different identities, the user was unable to complete the verification process.
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Zhou defended the exchange’s account-freezing practices in an X-Reply on Monday, saying that transferring account control to someone other than an authenticated holder would be “an indication of a duty to the user’s asset security and the platform’s responsibility.”
“OKX requires all users to use the platform with real name verification. Account buying and selling behavior clearly violates the OKX Platform Service Agreement.”
Although buying verified accounts is a legal gray area, Su said the platform can still help clear a user’s assets, provided they meet three criteria.
First, the sell-to-your-customer (KYC) persons must “clearly disclaim” ownership of the funds. Second, the accounts need to be free from judicial freezes and law enforcement investigations. Finally, accounts are required to provide “verifiable” evidence of sources of funds that meet regulatory requirements.
Crypto exchanges implemented KYC to comply with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations, ensuring legal operation and user safety.
New users are required to provide personal information and verification through documentation and can be approved to begin trading on most reputable exchanges.
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Platform Services are for real name verified individuals: OKX
According to OKX’s help desk, OKX’s cryptocurrency services are reserved for users who have completed KYC with their real identity.
“After verification, the platform service is only for the verified person of the account’s real name. You previously stated that the account’s real name information belongs to someone else.”
Most crypto investors expressed support for the exchange’s policies, even if it meant freezing all four purchased accounts.
“Fundamentally, no exchange will open such a backdoor, the consequences will be unimaginable! In the future, there will be people who rely on it specifically for fraud,” wrote crypto investor Lujeb3 in response to the incident.
QuintileGraph reached out to OKX for comment, but did not receive a response by publication.
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