OKX Freezes $40,000 in Stablecoins After User Buys KYC Accounts, CEO Explains the Decision
Crypto exchange OKX has frozen approximately $40,000 in stablecoins after discovering that the funds were held in accounts purchased from third parties. The decision has sparked debate across the crypto community, especially after the affected user cited urgent medical needs as the reason for accessing the funds.
The incident highlights a growing tension between user expectations and the strict identity and compliance rules enforced by major centralized exchanges.
What Triggered the OKX Account Freeze
The case involves a long-time crypto user known online as Captain Bunny, who said he bought four KYC-verified OKX accounts from other regions in 2023. The accounts were allegedly purchased to access OKX Jumpstart events, which were not available to users in mainland China at the time.
According to the user, the accounts remained inactive for nearly two years. In late 2025, he transferred around $10,000 in USDG into each account from his primary OKX account, planning to earn yield through a promotion offering roughly 10% annual returns.
When he attempted to withdraw the funds, the accounts were frozen.
Captain Bunny later stated that the $40,000 was needed urgently to cover medical expenses for a family member. He shared transaction histories, internal emails, and other documents online, arguing that the on-chain records clearly showed he was the source of the funds and the party in control.
Why OKX Says Identity Comes First
OKX responded by stating that the freeze was not about on-chain activity, but about account ownership. According to the exchange, ownership is determined strictly by the identity registered during KYC, not by transaction records or personal claims.
Star Xu, founder and chief executive of OKX, addressed the issue publicly, explaining that allowing access based on secondary claims would undermine both user security and regulatory obligations.
He noted that if exchanges accepted on-chain evidence alone, it would open the door to fraud, identity abuse, and money laundering. From a compliance standpoint, the registered account holder is the only legally recognized owner of an account, regardless of who funded it.
Risk Controls and Compliance Barriers
According to Xu, buying or selling KYC-verified accounts automatically triggers enhanced risk controls. These include facial recognition checks, identity verification reviews, and internal compliance flags.
OKX stated that funds in such accounts can only be released under very specific conditions. These include confirmation that the original registered user disclaims ownership, verification of the source of funds, and assurance that no legal or regulatory restrictions apply.
Without meeting all these criteria, the exchange says it cannot lawfully release the assets.
Platform Rules Leave No Room for Exceptions
OKX’s customer support team reiterated that its services are intended solely for the individual whose identity is tied to the account. The exchange referenced its terms of service, which state that users must be both the legal and beneficial owner of assets held on the platform and may not act on behalf of others.
From OKX’s perspective, making exceptions based on personal hardship would create dangerous precedents. The company argued that emotional appeals or public pressure cannot override compliance obligations designed to protect users and prevent abuse.
A Broader Warning for Crypto Users
The incident has reignited debate around the risks of buying third-party KYC accounts, a practice that remains common in regions with access restrictions. While some sympathized with the user’s situation, many in the crypto community sided with the exchange, arguing that identity loopholes could easily be exploited for fraud.
Several commentators noted that if exchanges allowed “backdoor” access based on transfer history alone, it would severely weaken platform security and regulatory credibility.
Conclusion
The OKX account freeze underscores a hard reality of centralized crypto platforms. On-chain transparency does not override identity rules. For exchanges operating under global compliance frameworks, KYC ownership remains the final authority.
While the user’s circumstances sparked sympathy, the case serves as a cautionary tale. Buying verified accounts may seem like a workaround, but it carries serious risks that can surface years later, often when access to funds matters most.
Disclaimer: This content is for informational purposes only and does not constitute legal or financial advice. Cryptocurrency platforms operate under strict compliance rules, and users should understand applicable terms before using any service.
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