OKEX suspended withdrawals, why these exchanges do not offer insurance

[DashingAgent]

OKEX suspended withdrawals, why these exchanges do not offer insurance

OKEX suspended withdrawals, why these exchanges do not offer insurance of our assets while they have a registration trade mark from the governments? All governments must strictly apply these kinda regulations to these exchanges that they are responsible for their customers crypto assets otherwise that exchange will not be given a license for their operations. They should also keep the alternative assets like gold/diamond or bitcoin to the governments banks where they are registered and only offer the equal deposits of the amount they keep in governments banks so if in case there is any hack attempt or something wrong could happen with their system, they should be responsible to sell those assets to cover the loss of their customers. This must be done by binance and all other crypto exchanges otherwise governments should either not allow them to execute any operation in their region or should cancel their licenses.

[dunfida]

You can whine but it wont really changed a thing. If there would be some insurances then that would be premium knowing that exchangers are really prone to hack.

The  thing here is that exchangers should really have that kind of funding like on what Binance did. They do able to compensate all of those users who did experience loss.

[jossiel]

We have a thread that's made already about Okex suspending of withdrawals.

OKEx Suspends Withdrawls on Exchanges.

It's an ease if we'll continue the discussion on that thread.

[Yamifoud]

It was the situation that OKEX didn't clear it out. Did OKEX have to shutdown their services? Maybe it was good to see then that seeing people keep whining about it. I don't think it was a big loss for the community, in fact, we have a lot of exchanges around and much more reliable than OKEX.

We have a thread that's made already about Okex suspending of withdrawals.

OKEx Suspends Withdrawls on Exchanges.

It's an ease if we'll continue the discussion on that thread.

Much better then for the OP to lock this thread.

And I was expecting the team to reply on there as it needs more clarification otherwise, people will think that they are one of those an exit scam exchangers.

[cryptoaddictchie]

Why Even use okex?
If we have exchangers like kraken and binance.

Actually there is nothing wrong with okex one of the good exchange also. Maybe they didnt anticipate this kind of situation. But I agree with you OP. Insurance is something an exchange should assured users in case of events like this.

I am glad that Ive already withdraw last few weeks my funds on okex cause if not. Im not sure how could I claimed it. This create a major impact on the whole market knowing a big exchange could compromise like this.

[exstasie]

Why Even use okex?
If we have exchangers like kraken and binance.

Actually there is nothing wrong with okex one of the good exchange also. Maybe they didnt anticipate this kind of situation.

They have a shady past. Fake volume up the wazoo. They were also caught investing client funds in high risk schemes: https://cointelegraph.com/news/two-chinese-exchanges-help-themselves-to-user-funds

Okcoin (rebranded Okex), along with Huobi, were the Chinese exchanges of choice in 2014-2016. When they left China in 2017, I believe they retained a loyal following of Chinese customers. I don't think Binance is that big in China. When I hear about the Chinese OTC market, Huobi is usually the name that comes up over and over.

Anyway, just saying that brand loyalty and long term presence in the Chinese market probably has to do with it.

[adaseb]

The reason why exchanges don't offer insurance its because it would be very difficult if not impossible to find any insurance company that is willing to take that risk. As far as I know some exchanges like Coinbase or Gemini, they have insurance however its on fiat funds and not on crypto. So if they got hacked and the hacker took $1 million in US funds from their bank accounts they would be covered, if they stole $1 million worth of crypto then they wouldn't be covered.

Crypto is still pretty new thing and most don't understand it. So no insurance company wants to take on that risk. The issue with OkEX was that they should of had a handful of people who had the private keys. Because lets say the person wasn't arrested but instead died for some sudden reason. The funds would be lost forever. The way they handle their security was just way too strict and now they have a huge issue.

[Josefjix]

The reason why exchanges don't offer insurance its because it would be very difficult if not impossible to find any insurance company that is willing to take that risk. As far as I know some exchanges like Coinbase or Gemini, they have insurance however its on fiat funds and not on crypto. So if they got hacked and the hacker took $1 million in US funds from their bank accounts they would be covered, if they stole $1 million worth of crypto then they wouldn't be covered.

Crypto is still pretty new thing and most don't understand it. So no insurance company wants to take on that risk. The issue with OkEX was that they should of had a handful of people who had the private keys. Because lets say the person wasn't arrested but instead died for some sudden reason. The funds would be lost forever. The way they handle their security was just way too strict and now they have a huge issue.

I don't know much about how insurance works but I think Kucoin CEO said their insurance covered the stolen cryptocurrencies from the famous Kucoin hack or he wasn't being transparent? Or if insurance companies are scared how could they inure those Crypto assets?

[Rodeo02]

I don't know much about how insurance works but I think Kucoin CEO said their insurance covered the stolen cryptocurrencies from the famous Kucoin hack or he wasn't being transparent? Or if insurance companies are scared how could they inure those Crypto assets?

I think exchange should be the one to insured its users  by having emergency funds stored .incase hacking like that  happen they have available funds to give to recover all the lost funds of its users and it will not came from other insurance company.

They always earn for its users so they need to also protect the security of users  asset that using their  websites .

[Emitdama]

But, there are already exchanges that are operating with insurance and you still don’t make use of them, instead you’re making use of OkeX, so why complain about it?

Okex has chosen the way they want their business to function, and it’s up to you to research their exchange or go through their FAQ to know how they do their own business, and if it doesn’t suit you, it’s best that you look for another exchange and start trading with them, an exchange that offers what you’re looking for.

Based on having insurance, Coinbase has insurance and most of their funds are stored in cold storage, all these things are clearly written on their website. So, always check before you start using an exchange. If the exchange is not offering the features you are looking for, there might be a reason, so look for another one if it’s that important.

[joniboini]

I think exchange should be the one to insured its users  by having emergency funds stored .incase hacking like that  happen they have available funds to give to recover all the lost funds of its users and it will not came from other insurance company.

Even if this is true I think they'd still pause withdrawal for a while until the situation got better. It would allow them to prevent malicious actors from abusing the WD function and help them with tracking where the funds go, etc. In short, whether insurance is present or not a pause in WD would always happen in a case like this.

[Vicky agarwal]

its a good exchange and expanding business on other countries also

[Wind_FURY]

OP, that's a good question.

What kind of licenses do cryptocurrency exchanges hold? I do not believe that they are the same as banking licenses that requires the bank to insure a percentage of a person's money held.

[figmentofmyass]

The reason why exchanges don't offer insurance its because it would be very difficult if not impossible to find any insurance company that is willing to take that risk. As far as I know some exchanges like Coinbase or Gemini, they have insurance however its on fiat funds and not on crypto. So if they got hacked and the hacker took $1 million in US funds from their bank accounts they would be covered, if they stole $1 million worth of crypto then they wouldn't be covered.

Crypto is still pretty new thing and most don't understand it. So no insurance company wants to take on that risk.

they have government (FDIC) insurance on dollar bank accounts. i don't think non-USA customers technically have insurance on cash.

coinbase does have an insurance policy on its hot wallets, which represents < 2% of total customer funds: https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured

Coinbase prioritizes the security of our customer's funds, all digital currency that Coinbase holds online is insured. If Coinbase were to suffer a breach of its online storage, the insurance policy would pay out to cover any customer funds lost as a result. Coinbase holds less than 2% of customer funds online. The rest is held in offline storage.

so does gemini: https://gemini.com/blog/digital-assets-insurance

[cheezcarls]

This is one of the disadvantages of CEXs like OKEx, in which we don't have the custody of our assets there. As they suspend withdrawals, this isn't a good thing for all of us. I only had a few sats left in my OKEx balance, but I need to deposit some more because of the minimum withdrawal in BTC.

I've attended an OKEx event in Manila early last year. Partnership manager Omar Chakroun even reached out to me about their trading competition last time, but I declined the offer because of my priorities.

I just don't know why they're not offering any insurance or emergency funds like OKEx and Binance did. It's not right.

[bonjouros]

You have a point there because many of us will feel safe if this is the scenario and we will not be worried if there is a hacking that will likely to happened in the exchange that we are currently using. But I guess, having an insurance will likely to cost them too much money or they cannot afford it and for worst cases the government that gives their licenses didn't care much about this scenario as long as they can get their taxes.

And if there is an insurance, there is also a big possibility that the exchanges owner will strengthen their security so it cannot be breach easily especially if they don't like to be forced to file a bankruptcy in the long run.

[DarkDays]

OKEX suspended withdrawals, why these exchanges do not offer insurance

OKEX suspended withdrawals, why these exchanges do not offer insurance of our assets while they have a registration trade mark from the governments? All governments must strictly apply these kinda regulations to these exchanges that they are responsible for their customers crypto assets otherwise that exchange will not be given a license for their operations. They should also keep the alternative assets like gold/diamond or bitcoin to the governments banks where they are registered and only offer the equal deposits of the amount they keep in governments banks so if in case there is any hack attempt or something wrong could happen with their system, they should be responsible to sell those assets to cover the loss of their customers. This must be done by binance and all other crypto exchanges otherwise governments should either not allow them to execute any operation in their region or should cancel their licenses.

This is true, and in fact since OKB, a native exchange token for OKEx, has lost nearly an additional 20% of its market value Saturday, "bringing its total drop to roughly 30% since the second-largest cryptocurrency derivatives exchange suspended withdrawals early Friday morning ”".

What's worse is that since the announcement of all withdrawals being halted "no further announcements and no timeline as to when assets will be released."
You can read more about the recent updates regarding this story here.

The situation is really bad, and it all looks like a joke, with nobody taking the responsibility to update all of the frustrated investors, no one seems to really know what's going on - and being in a limbo at a time like this must be infuriating for those whose assets are being locked up.

[escalante28]

It's nearly 9 days now since the withdrawals of funds from their platform been suspended and lots of users already getting out of their patience though they released updates every day. Just sad with the statement they are releasing because there's no specific reason why the suspension of withdrawals happened and they have no statement also on how long users need to wait for the withdrawal function will be up. Some users saying the statement is useless. So sad to hear the sentiments of the users.

[XCANA]

its a good exchange and expanding business on other countries also

Definitely, OKEX is a good cryptocurrency exchnage but they never envisage this level of damage done to them, a big cryptocurrency exchange of such should have insurance which will carter for victims when the worst happen.  Like what normally see among the big exchanges, they are after their businesses expansion than considering unforeseen events like compromise and compensations.