OKX Freezes $40K in Stablecoins After User Purchases KYC Accounts — CEO Clarifies the Decision

In a significant move, the cryptocurrency exchange OKX froze $40,000 in stablecoins after a user purchased KYC-verified accounts from third-party sources. This decision has sparked discussions about user compliance and safety measures within the crypto space.

Key Takeaways

OKX froze $40,000 in stablecoins from accounts procured through KYC purchases.
The user, known as Captain Bunny, aimed to access Jumpstart events unavailable in mainland China.
CEO Star Xu defended the exchange’s decision, emphasizing the importance of registered identity information for account ownership.
The incident has ignited discussions about the risks associated with buying third-party KYC accounts and the need for regulatory compliance.

OKX Freezes $40K in Stablecoins After User Purchases KYC Accounts — CEO Clarifies the Decision

Background on the Account Freeze Incident

Recently, OKX faced criticism after it froze $40,000 in stablecoins belonging to a long-time user, Captain Bunny. This action stemmed from Bunny's purchase of four KYC-verified accounts from third parties earlier in the year. These accounts were bought to enable participation in particular Jumpstart events exclusive to users outside mainland China.

Captain Bunny noted that these purchased accounts had remained inactive for over two years, with the only transactions being transfers of USDG from his primary account. The user intended to utilize the funds for a promotional yield offering 10% annual interest, describing the frozen assets as essential for an urgent family medical situation.

In a detailed post on X, Captain Bunny shared his long-term history with OKX, tracing back to its inception as OKCoin in 2014. He expressed his loyalty to the platform, having trusted it through numerous market fluctuations. In late 2025, he transferred $10,000 in USDG to each of the purchased accounts, only to discover that they were frozen when he attempted to withdraw his funds.

Image showing the user's account activity

Captain Bunny furnished on-chain transfer records, email exchanges, and other documentation to validate his claim and urged the platform to consider his case, stressing the urgency due to medical needs.

CEO's Response to the Situation

In response to the incident, OKX founder and CEO Star Xu emphasized the exchange’s stringent policies regarding account ownership. He clarified that account ownership is contingent upon registered identity information, rather than personal assertions or social media claims.

Xu articulated that permitting account access based on the claims of another party, even those substantiated by transaction records, could risk user asset security and breach regulatory commitments, which include anti-money laundering and anti-fraud protocols.

He further explained that accounts involved in buying and selling activities activate risk assessment measures, such as facial recognition and identity verification. Funds can only be released under strict conditions: the registered account holder must renounce ownership, there should be no legal constraints, and the claimant must provide verifiable proof of the funds' source.

Implications of Buying KYC Accounts

OKX's customer support reaffirmed the exchange's position, asserting that their services are intended solely for the individual whose identity is associated with each account. The exchange pointed to Section 4.6 of its terms of service, which states that users must be the rightful owner of any digital assets on the platform and cannot represent another party.

While Captain Bunny's appeal was heartfelt, the platform maintained that no exceptions could be made, emphasizing the larger implications of KYC regulations in the cryptocurrency industry. Introducing loopholes for the use of purchased accounts could compromise the platform’s integrity and regulatory duties, increasing the risk of fraud and misuse.

CEO Xu highlighted that regulatory obligations cannot be bypassed through public pressure or collective appeals. This situation has prompted a larger conversation within the crypto community about the potential dangers of buying KYC accounts from third parties. Many investors have publicly voiced support for OKX’s policies, recognizing the importance of maintaining identity verification and preventing potential abuses.

One user remarked on the temptation these backdoors could create for fraudulent activities, underscoring the challenges exchanges face in balancing user needs with compliance requirements.