The chief executive of the OKEx exchange, Jay Hao has recently announced that they are moving towards enhancing the security of its different fund storage methods. The statement had been forecasted on Telegram first and had later been posted on the exchange’s website as well. On October 16th, 2020, OKEx had announced that they were freezing the withdrawals of cryptocurrencies for all its users. As expected, it resulted in massive waves in the crypto space as a whole. The reason behind freezing crypto withdrawals was because the private keys of one of the multi-signature wallets of the exchange had gone missing. Therefore, the exchange said that it was unable to process any requests for withdrawals.
As a consequence of this move, approximately 200,000 BTC, which was valued at $2.3 billion, had been locked in the wallets of the OKEx exchange. A prominent blockchain analysis company, Glassnode provided this information. It had given rise to a lot of worries over the exchange’s reliability. The freeze remained in place for the next five weeks, after which OKEx once again resumed its withdrawals for facilitating users. In order to save face and to reassure its customers, the company’s CEO made a public announcement where he said that the whole incident had proven to be a hard lesson for the company, as well as its management, as a whole.
He stated that the incident had highlighted a number of factors that need to be considered and various weaknesses in the internal process of the exchange had also been brought to light. The CEO was quick to declare that the company was eager to correct all their mistakes going forward. According to the OKEx announcement, the multi-signature wallets of the exchange will remain in use, but they will make some improvements to them. The most prominent change will be that of the exchange now keeping backups of the numerous private keys in case they have to be retrieved in an emergency.
Another key fact to note about the changes is that the essential backups will be spread across different bank safes, which themselves will be maintained in three different countries. The exchange also said that those employees who hold private keys will no longer be allowed to go anywhere in the same vehicle. As a matter of fact, the exchange went as far as barring the three holders of private keys from being in the same country simultaneously.
If any unforeseen incident happens that causes one of the private keys to become unavailable, such as in the case of death or a tragic accident, the exchange will have the option of being able to get their backup private key. The exchange’s statement said that it will take them 48 hours to do so. Most centralized crypto exchanges use these multi-signature wallets for keeping their digital assets and OKEx is just one of the many. Even though these security measures may appear to be a bit extreme, they will most likely ensure that the wallets remain as safe as possible.