As cryptocurrencies have gained prominence around the globe, a host of digital currency-adjacent products and services have also become increasingly important. Apps making use of blockchain technology are one important example, and mining-related products are another.
A third and often overlooked category of services and companies which have gained interest steadily as cryptocurrencies have become trendy is digital asset trading platforms. OKCoin is one of the largest of these exchanges in the world, although it has come under increasing pressure from regulators in various countries.
History of OKCoin
OKCoin was founded in 2013 in China by Star Xu (pictured), who is now its CEO. OKCoin raised several million dollars in initial investments from a variety of venture capital companies in China and the United States, among other areas.
Star Xu has a background in technology management, including stints at Yahoo and Alibaba, in which he worked on developing search algorithms. He was also Chief Technical Officer at DocIn.com, a file sharing service.
Since its inception in 2013, OKCoin has developed into one of the largest cryptocurrency exchanges in the world by user base and transaction volume. It has also expanded with a mobile consumer payment and lending app service.
Due to regulatory issues with various countries, OKCoin is not able to provide service for customers in nine countries. (See also: China’s Confusing Relationship With Bitcoin.)
For users attempting to access the OKCoin website and trading platform from one of the affected countries, the following message appears automatically upon navigation to the OKCoin site:
OKCoin customers attempting to conduct transactions in other countries besides the ones listed in the message above have also reported running into messages of this kind, perhaps a reflection of an error on the part of the interface.
OKCoin was also deeply affected by the Chinese government’s crackdown on cryptocurrency exchanges. Along with Huobi, a major cryptocurrency exchange and competitor in China, OKCoin announced in September 2017 that it would halt its trading services for local customers, per the government’s new regulations.
Prior to that announcement, OKCoin had indicated that it would only halt yuan-based trading in cryptocurrencies. The news came shortly after China announced plans to ban all initial coin offerings. In response to the announcement, the price of bitcoin plummeted by about 20% in the span of roughly two weeks.
OKCoin continues to operate its cryptocurrency exchange for non-Chinese customers, and it was widely speculated that a plurality of Chinese investors in the cryptocurrency space would turn toward overseas exchanges for their business. OKCoin and Huobi were targeted in particular because they were found to be in operation without having appropriate Know Your Customer and anti-money laundering systems in place.
OKCoin made headlines in 2014 and 2015 because of a controversy related to the domain name bitcoin.com. OKCoin managed that domain from late 2014 through mid-2015.
In May 2015, the exchange made public its ongoing dispute over the domain name and management rights thereof with Roger Ver (pictured), the well-known bitcoin proponent and investor.
As part of the dispute, Ver published months of email history between himself and management from OKCoin. The emails purported to show that OKCoin had failed to make payments which it owed to Ver for use of the domain name. OKCoin offered a $20,000 reward to anyone who could demonstrably prove that Ver’s statements regarding the interactions were actually false.
Ver returned the favor by offering $1,000,000 to any individual who could validate the accuracy of a contract between himself and OKCoin. (See also: Who Is Roger Ver, aka “Bitcoin Jesus”?)
OKCoin experienced another controversial moment in November 2017. The exchange briefly listed bitcoin at a price of more than $15,000 per BTC, at a time when most other exchanges had the cryptocurrency priced around $7,000 per coin. The erratic readings from OKCoin’s system may have been linked to a brief outage in the exchange; at the same time, “compliance and sanction controls” for the exchange were malfunctioning.
OKCoin’s quick rise to prominence within the cryptocurrency world has been met in recent years with a number of barriers, including various controversies and regulatory issues. Nonetheless, the leaders of OKCoin have made clear their intentions to continue to provide their service in the best way they are able, and the exchange remains a popular international hub of cryptocurrency transaction.
Should Chinese authorities amend their regulatory stance toward cryptocurrency in the future, it’s likely that OKCoin will continue to be affected. However, if the past is any indication, OKCoin will likely adapt as best as it can to meet the new regulations in this case.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrencies.