The OKX exchange recently blocked 40,000 dollars from a user who purchased third-party verified accounts to participate in restricted events. This measure responds to the strict implementation of identity verification technology to prevent fraud across the board. Platform CEO Star Xu justified the action last January 12 after public complaints from the affected individual.
The incident involves an investor known as Captain Bunny, who purchased four KYC accounts during late 2023. The user sought to access Jumpstart promotions not available in his home region, specifically mainland China. However, when attempting to withdraw his funds for a family medical emergency, the security system detected irregularities in the ownership of the profiles.
Likewise, the affected person presented on-chain transfer records and emails to try to recover his blocked capital. Despite his loyalty to the brand since 2014, technical support maintained the freezing of digital assets. Therefore, the situation has generated an intense debate about the limits of privacy and regulatory compliance on global platforms.
Security policies and regulatory compliance regarding the purchase of accounts
On the other hand, Star Xu explained that account ownership is defined by the legally registered identity information. The CEO emphasized that allowing access to third parties based only on transactions would compromise the security of all custodial assets. In this way, the company prioritizes its anti-money laundering (AML) obligations over individual requests on social media.
The platform activated facial recognition mechanisms that the buyer could not successfully pass during the process. According to the management team, these tools are vital to ensure that the legitimate holder maintains total control. However, the user argued that the funds come legally from his main account and requested an exception for humanitarian reasons.
In this context, OKX recalled that using purchased accounts violates section 4.6 of its terms of service. Only if the original holder formally waives ownership could the funds eventually be released later. This firm stance seeks to prevent malicious actors from using false identities to manipulate the market or evade local regulations.
Does this case represent a dangerous precedent for the freedom of users?
The crypto community is divided between the need for security and the right to financial access. Many investors support OKX’s decision, considering that purchasing identities facilitates massive fraudulent schemes. However, others criticize the system’s rigidity in situations of documented personal urgency with clear evidence provided by the client.
Finally, this event highlights the critical risks of operating outside the legal frameworks established by exchanges. Platforms are expected to continue strengthening their cryptocurrencies and surveillance systems to comply with current international regulations. Users must understand that transparency in the source of funds is non-negotiable for large digital financial entities.
