OKG Holdings Says OKEx Founder Investigation Won't Impact Business, OKB Price Plunges Further

Lucas Cacioli  Oct 19, 2020 10:30  UTC 02:30

3 Min Read

As OKEx founder Mingxing 'Star' Xu remains under investigation following the suspension of the exchange's withdrawal service, OKG Technology Holdings Limited has told its shareholders that business operations won't be affected—even though Xu is a controlling shareholder of the publicly listed company. 

Despite Xu being under investigation by Chinese authorities and a controlling shareholder in OKG Holdings (Stock Code: 1499), the company announced that they expect the investigation into the OKEx founder to have little effect on its business operations or that of its subsidiaries.

OKEx Suspension and Founder Investigation 

Last week, leading Asian cryptocurrency exchange OKEx caused panic in the crypto markets after suddenly suspending its withdrawals to cooperate with an investigation.

The suspension of services immediately stirred a reaction in the Bitcoin (BTC) price which plunged 3% while OKB took a 15% hit on the day.

According to the first announcement by the major crypto exchange on Oct. 16, OKEx had suspended all cryptocurrency withdrawals as one of its private key holders was cooperating with a public security firm in regard to an ongoing “investigation.”

Soon after on the same day, it was reported by Caixin news, that the private key holder under investigation was OKEx founder Mingxing 'Star' Xu.

Xu had allegedly been taken into custody by police following the major crypto exchanges sudden suspension of its withdrawals as one of its private key holders was said to have been cooperating with a public security firm in regard to an ongoing “investigation”, according to two other sources close to OKEx.

According to the OKG Holdings announcement on Oct.18, the board of directors of the company was notified by the legal counsel acting for OKC Holdings Corporation on 16 October 2020 that Mr. Xu Mingxing is presently under an investigation by public security authority in the People’s Republic of China (PRC). OKG Technology has not yet been able to contact Mr. Xu to confirm the information.

Per the announcement:

“Mr. Xu is a non-executive Director of the Company and also the controlling shareholder of the Company (OKG) through his interests in OKC. As of the date of this announcement, OKC holds 3,904,925,001 shares of the Company, representing 72.60% of the total issued share capital of the Company.”

The OKG technology said that to the best of their knowledge the board is not subject to any ongoing government investigation in the PRC. The announcement also highlighted that they expect that the investigation with Mr. Xu will not have any material effect on the business operations or financial position of the OKG and its subsidiaries.

BTC Price Recover, OKB continues Plunge

As reported, following the suspension of services on Oct.16 at OKEx, the BTC price fell around 3%, but has now recovered from the scare and is currently valued at $11,467.35 at the time of writing.

The OKEx token (OKB) however has continued to fall. Prior to the OKEx suspension of withdrawals, the OKB price was around $5.88, it then plunged 35% before making a slight recovery. At the time of writing OKB, token price sits at $4.71 around 20% lower than Oct. 16.

Image source: Shutterstock

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