OKX to shut down Mining Pool operations amid 'business adjustments'
The shutdown comes on the heels of a major flash crash last week in which OKX's native token (OKB) experienced a 48% plunge.
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Crypto exchange OKX has announced it will phase out its mining pool services starting January 26th, citing “business adjustments” behind the move. The winding down of operations will halt new user sign-ups effective today and turn off services for existing users by February 25th.
The company’s mining pool previously supported several cryptocurrencies based on proof of work (PoW) consensus algorithms, such as Bitcoin (BTC via SHA256), Litecoin (LTC via Scrypt), and Ethereum Classic (ETC via Etchash). However, many supported assets had been removed over the years, leaving few active miners on the platform.
The shutdown comes on the heels of a major flash crash last week involving OKX’s native OKB token, which saw prices plunge 48% before rapidly recovering. In a post-incident report, the exchange pledged to reimburse users affected by the volatility and optimize its risk control mechanisms. This incident saw about $6.5 billion in diluted market capitalization before recovering.
“We will further optimize spot leverage gradient levels, pledged lending risk control rules, liquidation mechanisms, etc., to avoid similar problems from happening again,” OKX said regarding last week’s flash crash.
The move reflects declining prospects for proof-of-work mining overall amid the larger crypto industry’s pivot toward proof-of-stake consensus models. With the recent Merge upgrade transitioning Ethereum to proof-of-stake, Bitcoin is now the largest proof-of-work network.
Closing the mining pool marks a notable shift for OKX, which built its early reputation partly through serving crypto miners in China since launching operations in 2017. OKX, initially headquartered in Beijing, has been under scrutiny from the Chinese government, which has implemented a blanket ban on crypto trading and mining since September 2021. The company has since expanded into other business lines like payments, DeFi, and NFTs, viewing mining services as no longer core to its global growth strategy.
Other major exchanges like Binance and KuCoin continue to operate mining pools, seeing it as an additional revenue stream from their existing user base. With deep liquidity and available custodial services, exchanges may retain an edge in attracting the remaining proof-of-work miners even as broader industry trends move toward alternative consensus models.