First Mover: OKEx Private Key Snafu sends Bitcoin lower as DeFi rises in China

Bitcoin (BTC) fell 2% on Friday, the highest in three weeks, after the market was frightened by the announcement that cryptocurrency exchange OKEx had suspended withdrawals because founder Mingxing “Star” Xu would be caught. police custody.

The executive is the holder of a private key needed to authorize withdrawals, and that became impossible as it was not in contact, the exchange wrote in a notice posted early Friday morning. Officials at OKEx, which is based in Malta but led by Chinese executives, said the matter was a personal matter, not the exchange and should not affect ongoing business.

Traders said the impact on prices could be short-lived. “I don’t think this news colors BTC the wrong way as much as the venue,” Vishal Shah, a trader and founder of the Alpha 5 exchange, told CoinDesk.

Decentralized Finance, or DeFi, is one of the hottest trends in the cryptocurrency industry. So it’s no surprise that the DeFi craze can find its way into China, which has an active cryptocurrency community despite government restrictions on token trading and sales. Chinese startups are playing a crucial role in the DeFi boom with highly localized and agile adaptations of Western projects and a laser-centric marketing apparatus on China’s crypto communities, industry observers say.

From July to mid-October, the number of DeFi searches skyrocketed on the Chinese social media platform WeChat. It nearly doubled during this time period, according to WeChat Index, a data analysis tool that includes keyword searches, articles, and forwards in WeChat moments. Major Defi projects such as NEST, DForce and YFII, all with a huge Chinese following, have raised millions of dollars within a few weeks and topped the TVL rankings on DeFi Pulse. China often has a reputation for adapting Western products to local markets or, in some cases, for imitating them. Compound allegedly China-based DForce “stole” its code and Chinese liquidity-mining site YFII cloned another overseas-based project, Yearn.Finance (YFI).

“Sure, many Chinese projects copy the code of DeFi’s western pioneers like liquidity leader Yearn.Finance and decentralized exchange UniSwap,” Nervos co-founder Guoning Lü told CoinDesk. “However, Chinese companies are innovating in localizing original products and this is what makes DeFi products more popular in the country.” – David Pan
Read More: How DeFi Craze Arrived in China

Bitcoin is down but has not come out and a price collapse is unlikely due to the announcement that digital asset exchange OKEx had suspended withdrawals.

The cryptocurrency is currently trading near $ 11,300, which represents a 2% drop over the course of the day. Prices dropped from $ 11,519 to $ 11,231 in the 30 minutes at 04:30 UTC, more or less in line with the timing of the exchange’s announcement, according to CoinDesk’s Bitcoin Price Index.

OKEx announced an indefinite suspension of withdrawals, stating that one of its private key holders was cooperating with the police in the investigation and therefore was not in contact. According to the latest reports, the private key holder is the founder of the exchange, Mingxing Xu.

Therefore, market sentiment may remain weak for some time, although a price collapse seems unlikely.

“I don’t think BTC will necessarily dive from here,” Denis Vinokourov, head of research at London-based prime brokerage Bequant, told CoinDesk. “The flow of funds can seek out locations based in countries with a clearer regulatory position and political outlook.”

Additionally, the cryptocurrency has recently absorbed larger shocks such as the indictment of BitMEX by US regulators, the health fear of President Donald Trump, and the US fiscal impasse.

With prices holding above the previous resistance turned support at $ 11,200 (Sep 18 high), the immediate trend remains bullish. The cryptocurrency could revisit Asian session highs above $ 11,500 as US stock futures point to a potential risk-free mood reversal this week.

Currency USD (USDC): The dollar-linked stablecoin is added to the Stellar blockchain.

Filecoin (FIL): Decentralized data storage and content network initiates long-awaited token distribution after the initial $ 200 million coin offering in 2017. As of Friday, prices had stabilized around $ 55, for a capitalization market share of about $ 840 million, according to CoinGecko.

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Bittrex Global offers digital tokens with 3x leverage on bitcoin, ether and cardano. (Bittrex Global)

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Block.one releases “EOSIO for Business” for the corporate blockchain (CoinDesk)

US accuses 6 of Mexican drug cartel money laundering using cryptocurrencies and casinos (CoinDesk)

IMF Georgieva says US and China need to maintain coronavirus stimulus to accelerate economic recovery (Reuters)

Carmen Reinhart, chief economist of the World Bank and author of “This Time is Different”, said there is a growing risk of a financial crisis (Bloomberg)

French carmaker Renault draws part of € 5 billion government-guaranteed loan (Reuters)

Persistent coronavirus concerns hit investor sentiment for Asian traders on Friday (Reuters)

Weekly jobless claims in the United States unexpectedly jump to 898,000, versus 825,000 expected and the pre-pandemic norm around 200,000 (Bloomberg):