OKX founder and CEO Star Xu has publicly defended the exchange’s decision to freeze approximately $40,000 in stablecoins after a user admitted that the accounts involved were purchased KYC-verified accounts, rather than registered under their own identity. The case has reignited debate around identity compliance, asset security, and user responsibility on centralized crypto platforms.
The issue surfaced after a social media user claimed that multiple accounts were locked following internal risk control triggers. The frozen funds were reportedly held in USDG stablecoins, with the user stating the money was intended for urgent medical expenses. However, the individual later acknowledged that the accounts had been acquired from other people and verified under different names.
Captain Bunny on social media, said in a Sunday X post;
According to the exchange, additional facial recognition checks were required to access the accounts. Because the identities did not match, the verification process failed, leading to the freeze. Star Xu emphasized that real-name verification is mandatory, and that buying or selling verified accounts is a direct violation of platform rules and a threat to user asset security.
Xu noted that asset recovery may still be possible if strict conditions are met, including formal disclaimers from the original account holders, confirmation that there are no legal or judicial restrictions, and verifiable proof of legitimate fund sources.
The incident highlights how KYC and AML compliance remain central to exchange operations, even when enforcement results in frozen assets. Many investors supported the decision, arguing that allowing exceptions could expose platforms to fraud and regulatory risk.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.