Bitcoin Exchange OKCoin Accused of Tampering Contract, Money Laundering

By May 24, 2015Bitcoin Business
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Bitcoin Exchange OKCoin Accused of Tampering Contract, Money Laundering
Bitcoin Exchange OKCoin yesterday announced to discontinue its advertising services for, following a contractual conflict with its owner — Mr. Roger Var.

In its blog, the Chinese exchange recalled Var’s involvement in the recent Ripple Labs case, where the payment protocol company was fined by FinCEN over some suspicious activities. This particular case, alongside Var’s earlier federal felonies, forced OKCoin to take such a drastic measure — as per their version of truth.

“In light of the recent FinCen actions against Mr. Ver, OKCoin has taken the stance that it can no longer make contractual payments to Mr. Ver and therefore must end its current version of its management contract of,” the exchange had said. “To continue management of, OKCoin must face a different counterpart.”

Another Version of the Story

Var never wasted a moment to make his case before the Bitcoin community. The celebrated Bitcoin investor posted evidences against OKCoin, and ended up giving a different twist to the company’s aforesaid allegations. Here is the reworded summary of the entire conflict:

According to the initial contract between Roger Var and OKCoin, the former was to manage and develop for the period of five years. The original draft of this agreement was signed by Rogar Var himself and the CEO of OKCoin, Mr. Changpeng Zhao, granting the former a right to earn monthly cuts from the website’s revenue from advertising. The agreement further agreed to pay Mr. Var a sum of $10,000, even when the website generates less than $40,000 a month.

After failing to pay Var for consecutive months, OKCoin allegedly forged the original transcript of their agreement and added a new clause without other party’s consent, saying that the exchange will be in rights to cancel the contact after giving 6-months prior notice to Roger.

OKCoin meanwhile gave some amusing explanations through their CEO Star Xu. It said that their attorney was not in good terms with an English-based contract and could have misunderstood it in some parts. According to the exchange, their attorney was using Google Translate to reword an English contact into Chinese. We wonder why a company like OKCoin could not here a professional legal translator.

While these accusations were not just enough, a former OKCoin employee took Reddit to post further evidences against the exchange. “The intention of the CEO, Star Xu, was to use to advertise OKCoin,” he wrote.

“I know this because he rejected my first wireframe and asked me to add 2 links to OKCoin, one on the homepage just below the navbar and another just a few hundred pixels down. I still have the wireframes. Xu’s micromanagement of this project was among the reasons I left weeks later. There was no plan for quality content at any point. No plan to add value to the bitcoin ecosystem. There was only a plan to advertise OKCoin.”

Despite being one of the most successful Bitcoin exchanges to have come out of China, OKCoin is definitely losing credibility before the digital currency community. The foul practices has ripped it naked before the world, a damage that won’t be restored for a long time.

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