OKX Stands Firm on KYC Rules as Purchased Accounts Trigger $40K Freeze

What Triggered the Account Freeze?

OKX founder and CEO Star Xu responded publicly later than a user accused the platform of freezing roughly $40,000 in stablecoins held across multiple accounts that were not registered under the user’s own identity. The dispute unfolded later than the user, who posts under the name Captain Bunny, said OKX’s risk controls locked four accounts holding Global Dollar (USDG) tokens.

In a post shared on X on Sunday, the user said the funds were needed to pay medical expenses for his elderly father. He added that the accounts had been acquired in late 2023 and were originally verified under other individuals’ names. The user acknowledged that purchasing verified accounts is a common workaround among users viewking to bypass restrictions applied to residents of mainland China.

According to the user, access to the accounts was later restricted when OKX’s systems required facial recognition. Because the accounts were verified under diverse identities, he was unable to complete the checks and regain control of the funds.

Investor Takeaway

How Did OKX Respond?

Xu addressed the issue in a public response on Monday, defending the platform’s handling of the accounts. He said allowing account control to be transferred to someone other than the verified holder would amount to a serious breach of .

“OKX requires all users to use the platform with real-name verification. Account purchaseing and tradeing behavior explicitly violates the OKX platform service agreement,” Xu wrote.

While rejecting the idea that OKX could simply release the funds, Xu said the platform may still assist the user in clearing the assets if specific conditions are met. First, the individuals who originally passed must explicitly renounce any claim to the funds. Second, the accounts must not be subject to judicial freezes or law enforcement investigations. Third, the user must provide verifiable proof of fund origins that satisfies regulatory requirements.

Xu described these steps as necessary secureguards rather than discretionary actions, framing the situation as a compliance issue rather than a customer service dispute.

Why Are Purchased Accounts a Red Line?

purchaseing and tradeing verified platform accounts occupies a legal gray area in many jurisdictions, but platforms generally treat the practice as a serious violation of platform rules. Know Your Customer checks are designed to link accounts to a single, identifiable individual, allowing and counter-terrorism financing requirements.

Most large platforms require users to submit identity documents and complete biometric verification before . Once approved, the account is meant to be used only by the verified individual. Transferring control breaks that link and fragileens monitoring around fund flows, sanctions exposure, and fraud detection.

OKX reiterated this stance in a separate response to the user, stating that platform services are reserved for the real-name verified individual associated with the account. The platform noted that the user had already admitted the accounts were registered under other people’s identities.

Investor Takeaway

How Did the Crypto Community React?

Reaction from other crypto users largely sided with the platform, despite sympathy for the personal circumstances described. Several commentators argued that unlocking assets from purchased accounts would create a dangerous precedent.

“Basically, no platform will open this kind of backdoor; once they do, the consequences would be unimaginable! In the future, there will be people who specifically rely on this to commit fraud,” wrote crypto investor Lugeweb3 in response to the incident.

The episode has renewed discussion , especially those operating across multiple jurisdictions with differing rules on crypto access. For users in restricted regions, account purchases remain a risky workaround that can fail when platforms update controls or respond to regulatory scrutiny.

What Does This Mean for Users Going Forward?

The dispute highlights a growing divide between user behavior and platform compliance standards. As platforms increase biometric checks and tighten internal monitoring, accounts that do not match the verified user are more likely to be flagged, frozen, or permanently locked.

For OKX and similar platforms, enforcing strict identity rules reduces exposure to regulatory penalties and fraud. For users, it reinforces a hard lesson: funds held in accounts that cannot pass verification may not be recoverable on demand.

Whether the user is able to satisfy OKX’s conditions remains unclear. But the platform’s response suggests that asset recovery, if possible at all, will depend on documentation, cooperation from the original account holders, and a clean compliance record—rather than public pressure.