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OKEx CEO answers users’ questions about the recent withdrawal pause
Here are the highlights of Jay Hao’s Ask Me Anything session on Telegram — OKEx AMA Series
On Nov. 26, OKEx CEO Jay Hao joined a live Ask Me Anything session on the official OKEx Telegram channel and answered questions asked by some of its 27,000+ members.
The purpose of the chat was to connect with the OKEx community and address the platform’s recent pausing of withdrawals — which have since resumed. OKEx is now back to business as usual — though, as Jay explains, “business as usual” looks a bit different.
OKEx has spent years building trust by offering a diverse and constantly evolving product suite, building a strong relationship with the user community and — above all — providing industry-leading security.
During the AMA, Jay thanked OKEx users for their loyalty and support while properly acknowledging the uncertainty that the withdrawal pause created.
What happened and what is being done to prevent a situation like this in the future? These questions and more were answered by Jay in the AMA — the highlights of which are reproduced below — as he discusses how this challenge has created an even stronger “business as usual” at OKEx.
Welcome, Jay! It has been a tough time for both users and staff at OKEx these past few weeks. We have undergone an immense challenge. However, it seems that everything moved in a positive direction. Can you tell us what happened exactly? How did it impact the platform operations?
Jay: This has been a challenging time for all of us — but especially for our users. While they never had to worry about the safety of their assets, as we have repeatedly reassured them that all funds are safe, they had to deal with uncertainty, as we were unable to give them an exact date for when withdrawals would be open. Uncertainty can cause inconvenience and stress, and we can only apologize for this. We are so very thankful to our users for their continued support and will grow stronger and better together with them.
All other operations on the OKEx exchange remained unaffected. We continued to maintain a “business as usual” approach throughout the suspension period while working on enhancing OKEx’s risk-management system to safeguard user assets, supporting the Bitcoin Cash hard fork, listing the new asset (i.e., BCHA), and airdropping tokens into Bitcoin Cash holders’ wallets.
We have seen an understandable decrease in trading activity on the exchange. However, we have also received a lot of support and encouragement from our users — not only through messages but also when we look at the data from leading platforms, such as skew. Despite the pausing of withdrawals, OKEx held strong among the top BTC futures exchanges and is still leading the pack as the foremost derivatives exchange in terms of open interest on BTC futures.
We have also continued to forge ahead with the listing of new projects and are in talks with new companies to partner with in an effort to further build the OKB ecosystem and enhance the user experience on our platform. We know that many customers have had their trust in us affected, and we sincerely apologize for this. Our work from here onward is clear: We will uphold our commitment to winning back users’ trust and ensuring that OKEx remains their platform of choice for investing and trading digital assets.
Glad to see that OKB ecosystem development continued, as well as all other operations on the exchange remaining unaffected during the withdrawal suspension. What are your thoughts on this incident, and how do you think OKEx should proceed from here to boost the crypto trading community’s confidence in the platform?
Jay: I think that the incident highlighted several very important points. It exposed some weaknesses in our internal processes, which we are now steadfast in correcting. However, it also highlighted the strength of our infrastructure and security — in that we were able to safeguard all user assets, as well as continue to maintain operations on all other functions of the exchange.
Outside of OKEx, the incident highlighted the cryptocurrency market’s maturity — reflected in the price of BTC and other major assets in their resilience to the news. We also found out how supportive and loyal OKEx customers are and how confidence has remained high in our platform. Not only will we be thanking them with generous rewards programs but we also hope to restore any loss of trust.
We will also continue to enhance the user experience, roll out new products and features, and listen to customer feedback. Apart from being CEO of OKEx, I have another very important job at the exchange which is Chief Customer Service Officer. I regularly speak to customers one-on-one to identify their pain points, listen to their suggestions, and accelerate their ideas and needs through our product development process.
How are you planning to deal with the hot wallet and private key holders issue in the long term?
Jay: Once again, we apologize for any and all inconveniences and we will strive to continuously improve internal processes in order to prevent similar situations from happening again in the future. We sincerely appreciate your patience.
Let me begin to answer your question by addressing some of the incorrect statements that have been made regarding our security and wallet management system:
- Our hot wallet system has used, and will always use, a multisig mechanism for authorization.
- Each private key — yes, we have multiple private key holders — has a backup. There will never be assets lost due to unforeseen events happening to a private key holder.
- The withdrawal pause was unrelated to any technical problems on our platform.
Moving forward, we wish to be as transparent as possible with our community, and this incident has led us to make several improvements in our internal processes. Updated details in regards to private key management include:
- Private key generation
- Private key backup
- Enabling the master private key
- Enabling the backup private key
Here is a look at our latest hot wallet mechanism:
Please visit the following page for more details, including a list of safeguards and conditions:
After OKEx announced the withdrawal suspension, there were reports of on-chain transaction records stating that there continued to be some on-chain out-flow from OKEx. This made users and the whole crypto market more anxious than ever. Instead of refuting the rumors with public statements, why wouldn’t OKEx directly announce all the wallet addresses and on-chain transactions? Wouldn’t that be a more transparent way for users to keep track of the situation?
Jay: Some of the wallet addresses on OKEx have been publicly marked by some third-party blockchain explorers and channels. However, sometimes the channels mislabel other wallet addresses as our wallet addresses — which has led to panic in the past. For some time, we have been communicating with those channels, one by one, to correct or remove the wrong reports.
In the coming months, we will launch a new exchange transparency plan that allows users to closely monitor wallet addresses at any time.
Rumor has it that the recent withdrawal suspension was a result of an accusation of money laundering from the Chinese authorities. How can you alleviate users’ concerns regarding these rumors?
Jay: As one of the earliest established platforms in this industry, OKEx has been conducting business under the premise of strict compliance with regulatory frameworks around the world. This is one of our major principles. If we are involved in money laundering or other suspicious illegal operations, we cannot grow with this industry.
As stated in many previous announcements, the investigation has no relation to OKEx. We have established, implemented, and continue to refine an Anti-Money Laundering, Anti-Terrorist Financing, and Trade & Economic Sanctions Program since our inception to ensure a robust and compliant digital asset trading platform. We want to promote legal, transparent business activities and maintain a strong reputation among our customers, regulators, and the digital asset industry.
With the coming reopening of withdrawals, I heard that OKEx has prepared a series of user rewards programs. Jay, can you tell us more?
Jay: To express our apologies and thank our loyal users for their trust, we will launch several compensation and reward programs.
The first one will be the Happy Friday Reward Program. For users who have made deposits, held tokens, or traded during the time frame in which withdrawals were closed, OKEx will put 20% of its total contract fees into an incentive fund that will be issued as a one-time payment to users based on their assets and transaction conditions. The asset weight calculation will be double for OKB holders.
Second, we will waive the service fees and refund them to users. For users whose assets exceeded 10,000 USDT before the announcement at 00:00 (HKT) on November 24, 2020, a commission rebate card valued between a minimum of 100 USDT and a maximum of 1,000 USDT will be issued.
For all platform users, further futures and perpetual swap transaction-fee income incentives will continue to be issued every Friday, and OKB holders will always have the option of having their OKB asset weight calculation doubled.
In closing, revision of the OKEx protocol and procedures are underway, and this will be a continuous process. In order to avoid similar platform disturbances in the future, there will be constant evaluation of a diverse list of factors moving forward.
Jay and the entire team at OKEx express sincere gratitude to the community for their patience and loyalty throughout the pause. The team knows that trust is to be earned and is up to the challenge.
As the crypto continues to move more into the mainstream, OKEx will be humbly focused on building the OKB ecosystem, improving product offerings, connecting positively with the community, and further enhancing user experience on the platform.
OKEx remains steadfast in its commitment to delivering a top-tier trading platform and to remaining a trusted and reputable leader in the industry.