The water ice (as in, frozen water — not ice made from a molecule other than H2O, which is common on other worlds) that coats Charon's pitted surface was once kept relatively warm by the heat of the newly formed body. It's possible that water deep below the surface got warm enough to form a liquid ocean. Later on, this formation heat dissipated and would have left the subsurface ocean frozen rock-solid — cracking the moon as it expanded and strained to find space.
Charon was already a pretty weird place: At half the size of Pluto, it's closer in size to its host planet than any other satellite in the solar system. In fact, one could make the argument that it's more of a binary (dwarf) planet than a moon. Instead of Charon orbiting Pluto in the usual way, the two worlds face each other and spin around a common point in between.
And instead of having a totally crater-pocked surface (like our own moon), Charon has a variety of surface textures and features that hint at fairly recent active geological processes that have continued to reshape its form. In fact, Charon is home to one of the longest canyon systems ever seen in the solar system: It's about four times longer and more than four times as deep as the Grand Canyon.
If Charon does have a subsurface ocean, it's frozen solid. But other, closer moons in our solar system maintain similar oceans to this day. In fact, some of those icy ocean worlds — Europa, Ganymede and Enceladus, to name just a few — are widely considered to be the best places to go looking for microbial life.