OKX, a prominent cryptocurrency exchange, has recently made headlines after settling a $500 million lawsuit with US authorities. The company’s CEO, Star Xu, has acknowledged previous shortcomings in compliance but emphasized that US customers only made up a small portion of their overall user base.
In a statement on Feb. 24, Xu expressed OKX’s commitment to bolstering regulatory practices and working closely with authorities globally to establish the exchange as a compliance benchmark. He outlined the company’s vision to set the gold standard for global compliance across various markets and regulatory bodies.
The settlement involved OKX’s operator, Aux Cayes Fintech Co. Ltd, admitting to operating an unregistered money-transmitting business in the US. As part of the agreement, OKX will pay over $504 million in financial penalties, including an $84 million fine and the forfeiture of $420 million generated from US-based clients.
Acting US Attorney Matthew Podolsky revealed that OKX had violated anti-money laundering laws by neglecting to implement proper safeguards, leading to over $5 billion in suspicious transactions. The Department of Justice (DOJ) also accused the exchange of allowing US clients to access its platform despite policies against such activities and failing to register with FinCEN.
Furthermore, OKX was accused of enabling users to circumvent know-your-customer (KYC) protocols by providing false information, resulting in undetected illicit transactions. FBI Assistant Director James Dennehy condemned OKX’s actions, stating that the company had actively sought US customers and advised them to provide false information to bypass regulatory procedures.
Despite these compliance failures, OKX highlighted that US customers represented a small fraction of its global user base and confirmed that there were no allegations of harm to customers or charges against employees. The exchange expressed its commitment to respecting regulations in all markets and emphasized that the settlement would propel them towards becoming a global compliance model.
In light of this settlement, OKX assured that their compliance controls are now among the industry’s leading standards, marking the resolution of this matter. The news coincides with other major platforms like Coinbase, OpenSea, and Robinhood escaping further SEC investigation, fines, or enforcement actions.
Overall, OKX’s resolve to enhance regulatory practices and collaborate with authorities signals a new chapter for the exchange as it strives to set the benchmark for global compliance in the cryptocurrency industry.