On Sunday, the crypto exchange OKX paused withdrawals for nearly five hours, triggering a new wave of cryptocurrency exchange insolvency.

Contrary to the thoughts of many, the OKX withdrawal process freeze is not related to any insolvency or liquidity issues. Users were not able to process withdrawals at the time due to third-party service which was not providing full access to OKX.

As per OKX on-chain data, the last transaction prior to the withdrawal freeze suggested that OKX transferred nearly 1 million SOS tokens to an unknown address.

Amid many users attempting to access and withdraw their holdings in the exchange due to panic, the inability of users to withdraw their holdings is Alibaba Cloud’s service being unavailable during the 5 hours period.

A statement from Alibaba cloud service revealed that equipment in zone C in Hong Kong lost connection with a central server and the concerned department was working on it to ensure that normalcy is restored. 

With the fact that the founder of OKX is Chinese, there is a possibility that it could be using Alibaba’s cloud services for ensuring a stable connection for its users. Because of the problems with exchange access, no withdrawals are being made, which does not mean that the trading platform itself has any problems.

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