Bitcoin Forum

Okcoin, the biggest Bitcoin exchanger(aprox 80% from market) has been found guilty of unlicensed money transmitter(similar license for China) and other illegalities.

http://8btc.com/thread-37836-1-1.html

The Higher People's Court of Heilongjiang Province, rulled that Okcoin business is illegal because they don't have a proper license.
Okcoin company declared that they will only offer:  technology development, transfer of technology, technical services, technical marketing, consulting and investment management.
Trading bitcoin for profit-making purpose is beyond the range permitted by the administrative authorities.  They would need many other licenses.

More, the judge said that Okcoin favorize the criminals for laundering money.

Okcoin is well know for their shaddy business like fake volumes and price manipulation.

Even Lee, the BTC China CEO  said that a while ago "... Okcoin and Huobi are known for inflating trading volumes artificially, basically selling from left hand to the right hand."

http://www.coindesk.com/chinese-bitcoin-exchange-okcoin-accused-faking-trading-data/

http://bitcoinpricelive.com/chinese-bitcoins-crash-market/


Their clients should be aware that OKcoin can be closed anytime.Don't keep your funds in Okcoin !

Thanks for posting this! I try to comb through 8btc but it can be quite the headache when you don't read Mandarin. :D

I've always thought Okcoin was shady. First, it was volume pumping allegations, then bucket shop/trading against users/skipping orders allegations. Then the CTO admitting that they gamed the proof-of-reserves audit, and that they trade against users with money unbacked by real assets. They have a real shady corporate structure too, shady people involved (criminals).

can you imagine that Okcoin "owns" 80% from BTC trades? :)   The world is up side down. The fraudsters are ruling BTC and the people are OK with that.

 They keep depositing the money into a DEEP shit whole like Bitfinex even Bitfinex stole their funds; they use unlicensed exchangers and then...they are winning on forums that their money are gone and someone must help them :)

They are infamous for faking trade volumes and other shady stuff just to garner a large following from traders. Up to now, I'm wondering how they are still operating given that, well, their license doesn't cover anything such as trading and exchanging coins to USD/CNY/other currencies. It's time to pull out your assets in that shady exchange before they create another con ala-Gox.

Aren't fake volumes and/or price manipulation standard operating procedure for all Bitcoin related exchanges?

time for another "bank run"

Maybe for major Chinese exchanges. Huobi has definitely been accused of this as well. But if you compare Okcoin or Huobi's volume to Western exchanges, it seems obvious who is really pumping volume numbers. Okcoin was claiming earlier this year that the entire tradeable supply of Bitcoin was being traded every few days on their exchange. Give me a break. Not nearly enough algos running on Okcoin to even begin to make those claims.

That said, I think Bitstamp inflates its volume numbers.

ALL ARE MANIPULATING.

They have the most to gain.

"Fees" are collected if a coin goes up or down.

They own the Bitcoin world.

I hear ya. I think more than anything, many exchanges engage in bucket shop behavior (stop running to liquidate traders, etc). I think Bitfinex has been heavily involved in this historically. Okcoin and Huobi also.

However, I think there are degrees to which exchanges are manipulating, and Okcoin and Huobi are the worst offenders. Followed by Bitfinex. Bitfinex has always been very, very shady. Now there is just absolutely no reason to risk keeping funds there.

all the exchangers are doing this(Bitstamp is well known for fake volumes... :) ). I personally know someone from a big exchanger and this is the standard procedure. even, it's big, they have a lot of fake transactions just to show that they have BIG volume, that they have many clients and so on. these things attract new clients. a "ghost" exchanger with few trades will not be used.

also, the fake volumes are good for price manipulation...the exchangers are not earning from their fees but from other shits

wasn't this the place that turned out to be keeping their cold storage in the ceo's girlfriend's moms closet?

I've read elsewhere that this is a civil case so it's nowhere near as alarming as if they were feeling the full force of criminal law.

regardless of that, i'd love to know how legit any of these Chinese exchanges are and whether anyone in the government is paying attention. one curious official might shut them all down in one afternoon.

bitcoin would take a huge knock if these places went away but it would probably show us how fake they were in the long run.

Not long ago the Chinese government started allowing direct deposits from Chinese bank accounts into Chinese exchanges. If it was considering shutting all the exchanges down I don't think it would have allowed direct deposits. Allowing those direct deposits legitimised exchanges in China.

I believe the story is that Star Xu (CEO) gave the private keys to his mother for safekeeping. Pretty sure it came from the former CTO. :D


Yeah it's chump change anyway, 600k yuan. But it does make me wonder if it could lead to further investigations into their operations.


Agreed. The government could purge them all instantly if they felt threatened.

but does that mean anything's been formalized? it might be something they can revoke any second they feel like doing so. they didn't hang around in late 2013 when it looked like people were starting to use it as an actual currency.

They are as legit as all the American ones.....

uh, like itbit with their trust charter under new York banking law with the New York State Department of Financial Services monitoring their every move and demanding regular audits? the first one issued to anyone since 2008 and it took over a year to obtain?

yeah. I heard you can get one of those for 0.001 btc if you slip it to the right senator. I might pick up one myself tonight to impress the girls.

the warning is very clear. DO NOT keep your funds with Okcoin.

aprox 80% from market?

I think this figure is exaggerating, okcoin's figure is fake and most volume is generated by robots, 80% is fake.

So the court ruled they're illegal, but they keep operating? If it was elsewhere (America, as an example, and especially in New York), they'd probably be having a hard time right now :D

As for money laundering, there must be proof of that... I'd be curious to see it.


Weren't they licensed (or in the process of acquiring licenses)?

Anyways, Mt. Gox was supposedly licensed too, and we all know what happened...


Probably. I'd like to see real data on this. I'm afraid we'll never have it.


Selling from left hand to right hand, as it says on the OP...

I think the question here, that we should care about is that how much do you think it can affect the price.

I know that OKCoin was the biggest Chinese exchange that existed. but also I remember that their price did not really have any big effect on bitcoin price since a while back when the price was rising towards the moon, price on OkCoin was already a great deal above dollar value and it didn't seem to affect bitcoin price in any positive way.

so what do you guys think?

I think we must all very careful with using the exchanges. We shall see more of them come and go. The actual details of the recent hack of one of the biggest exchanges is still unknown; exchange with 80% (!) global bitcoin exchange volume is under money laundry investigation... These are creating bad images for bitcoin.

Since the Bitfinex hack affected the price, I'd risk in saying that if OKCoin closed down right now there would be a small(er) "dump" in price too, not because of lack of trust in Bitcoin, but because whales take advantage of pretty much any piece of news to make the market go up or down... :D

despite the fact that everyone knows what's going, markets run on perception and enough stupid people would panic for there to be a hefty fall and more doldrums. the whales depend on the sentiments of the dimwits to take more coins off them.

Yeah, this greatly influences the growth and image of the bitcoin. If this still happens then growth will be hampered by the bitcoin news such as this and this will also have an impact on the price of the bitcoin unchanged (stable). I hope we can improve themselves and browse in advance all of the sites. cause if not then a case like this will increasingly occur whenever

well, it is not yet closed down and doesn't seem to be closing down either. because i think the authorities knew about everything before and they have to be doing something right to stay open for this long.

also about price i have to say it has nothing to do with volume being fake etc, just as the hack had nothing to do with dumping because the hacked coin are not moved. it is all about "panic" and that is what controls the dump size.

I wouldn't trust an exchange that faked the Bitcoin trading volumes. Also, for the safety of performing ethically and running their business operations legally, they've had to have legally applied as a Bitcoin exchange. I'm assuming somehow legally applying as a Bitcoin exchange might be illegal in China. Also, I fear a fall in price of Bitcoin if OKCOin is taken down, since it is presumed to be one of the largest Bitcoin exchange.

That is the reason if the small traders start to panic and sell then we can see some 5 to 10% of btc price going down as their will be small sell, but if the site is running even after news then i think their may be anything big surprise is waiting for all bitcoiners.

i guess you should avoid keeping your funds in any exchange not only okcoin, and i'm not trusting any exchange let alone chinese exchange with fake volume, and right now we have only kraken at this point which was not hacked

correct! you must withdrawn your remaining funds(if you are a trader) as soon as you hear something like money laundering accusation. OKcoin may be raided any day and the funds will be seized.

That is the beauty of bitcoin, it's hardcore self responsibility. If you dont want to get scammed, understand that all exchanges are prone to being "hacked" unless they are decentralized.

"More, the judge said that Okcoin favorize the criminals for laundering money."

Money laundering? How is this possible if it is with bitcoin?
They have been around ever since I started using bitcoin so why now are they just seeing it as an illegal exchange? ::)

thats true, exchanges might easily run away in the future and because of that you would lose all the money you have deposited in it

they received money(fiat) and the send money(fiat) in exchange for Bitcoin. It's so simple.

If you lose all your money invested in Bitcoin in this manner, you are straight out stupid. We warn against storing large amounts of Bitcoin on exchanges in every second thread about exchanges and we

have had MANY warnings from actual exchanges going down, like Crypsy / Mt Gox etc.... So do not come with this shit excuse when you lose money at dodgy sites like this. People who use these

unregulated exchanges for illegal things, should also lose their damn coins... the more they lose, the better for all of us, who wants to use Bitcoin for legal things.  >:(

You've obviously been paying attention. Yes it is normal.

The worst case was MtGox. They artificially pumped bitcoins price to $1,200 per coin.

I believe the main problem on exchanges still belong to people leaving all their bitcoins inside them, that produces most kind of problems, there is the need of strong advertising about the advantages of moving Bitcoins to websites only when it is needed for a trade or investment and not use them as store vaults.

OKcoin always was a shady exchange. They had all the indications of running a shady business... and this news are not the first

I never put my money overthere. Best to put it at BTCChina.

You are thinking of the United States State Department's Secretary of State's email server, right?  :-) 

That is pretty funny though - cold storage in the closet.  At least do it in the freezer.

yet some dev's want the opposite.. they want you to deposit bitcoins into exchanges. and instead of withdrawing funds to arbitrage, they want to give you some sidechain or altcoin that represents your balance to internally move between exchanges.
research : Liquid sidechain

Even if no enforcement action is taken against OkCoin, this will impact them negatively because many people do not want to engage in business with someone who is "illegal".

If OkCoin is in fact insolvent (I have no idea one way or another if they are), then this fact will likely become apparent in the coming weeks, as their customers attempt to withdraw.

Yes, this is exactly what I meant ;)

This is new information to me.

any update new about okcoin now ?

People should totally oppose that proposition, besides it looks like the start of a fractional reserve system, the problem is the same, it can't avoid or reduce in any number the hacks they can suffer.

This is not surprising. I suggest checking the volume created by LTC. What is the basis of all that volume? LTC is mostly considered "dead" by the community. There is no active development, no projects built on top, no nothing and yet it has maintained a high amount of volume. Some have suggested that it is the coin of choice by the Chinese money launderers.

true...BUT the main BTC media doesnt' say a word. is it not strange? :)

does mainstream media talk about every US tax evasion/FIAT money launder court case.. nope
does mainstream media talk about every fed reserve audit.. nope
does mainstream media talk about many things about the truth of fiat.. nope
does mainstream media explain the bait and switch tactics of the fed that have screwed everyone.. nope

most of the time it ends up in a private documentary that may be interesting and insightful enough to appear on a documentary channel some day

the BTC market is small and I am sure the BTC media can cover subjects like "Chinese money launderers are using LTC" or Bitfinex owners do not provide any evidence about hack, IF they want( if they are not greased) ...

Regarding to your questions :   "you" want to be something different than all the aboves, right? :)

Seems doubtful, as this story never really hit the press. Doesn't seem people made much of a fuss over it.

Whether OkCoin is solvent has always been a major question for traders. We have long suspected that OkCoin trades against their customers, and the former CTO confirmed this in a blog a year or so ago. I believe he said that the exchange's accounts used un-backed (unlimited) money as well. He also said the proof-of-reserves audit done a couple years ago was faked.

Still, no one seems to care.... sigh.

the BTC "press" is greased and it depends on these exchangers. they are pumping the money for "advertising" and that's why you can hardly see negative things about them.

Well, if they really were doing that inflating thing they probably got what they deserve. In all it's bad that Bitcoin is on the news with negative shade again.

Buy the way the punishment, a fine of 627,569 Yuan (around $94,000), which has been ordered by a provincial court for Okcoin to pay, is not as big as I expected taking into account the money laundering accusation.

Sounds like someone is in trouble and could be in for a hefty jail term....... :o

chinese people like their coins, thats where the volume comes from i guess though it is definitely not a good thing as it is just a pump and nothing else

The mere fact that LTC costs more than $2 proves that some still use it, probably in China. You can't blame OKcoin for the volume generated by LTC.

Litecoin seems like the coin that never will ever die. It was the second to bitcoin and it looks like it will last just as long as it's predecessor. ;)
I don't even like calling it an alt coin because it is in a different category all it's own. ;D

OKcoin, bitfinex, and now several complaints regarding coinbase. Some safe exchange left?

Unfortunately every cryptocurrency trading platform is vulnerable to such "government" attacks.

Politics can hit bitcoin anytime they want.

Bitcoin will never gain enough trust...

i have been seeing this topic being bumped from now and then and yet i don't see anything happening to Okcoin the site is still up and running, and the exchange volume is still high.

if the Judge has ruled against them why are they still active?!!

I’m glad that people got busted. Business fronts like these need to be crushed so that all the legit companies can come forward. Then the stigma of bitcoin being an “illegal commodity” will be silenced. These people are what help fuel the bad stigma around bitcoin and it’s users.

I believe it was a civil case and they probably got fined. Case closed. If it was criminal then there'd be more squealing on here.

May be a hint how to fight Bitfinex ?

Sorry but you know shit, about what you talk
Keep your ICO primed scam and trash anything hones, its the new moto of manipulators

Had traded LTC at okcoin with no problem, sure there are dozen of bots with 0% fee, and had zero problem, they even check in person for withdrawal over 2000 LTC by calling you on phone

I don`t know state on ANY crypto exchange, also BTC is like forbiden in chine so haw than a exchange can be licensed?

i only agree thay crypto should be kept offline in your own wallet, but sometimes you must do a trade and its almost same risk with any exchange, was it hoube, okcoin, btc-e to me all the same.... maybe some USA based exchange with all the licences but I am not from USA!

I think until now there has been no evidence to prove this news, natural problems like this arise to the biggest exchange sites.

I noticed too, as BTC price move, there are more and more allegations abut stolen funds, defunct exchanges, its becoming harder and harder to filter FUD from real information which is sad
I presume trader that gone wrong in trade will do anything to change the curs of the price