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OKX is a cryptocurrency exchange situated in the Seychelles. Investors can purchase Bitcoin, Ethereum, and other cryptocurrencies on this site. Hong Fang is the President, and Haider Rafique is the CMO. The OK Group, which also runs the cryptocurrency exchange Okcoin, is the owner of OKX.
OKX platform is willing to pay fines and penalties totalling around $505 million for seven years of breaking US anti-money laundering regulations.
OKX Broke Anti-Money Laundering Laws
On Monday, Aux Cayes FinTech Co. entered a guilty plea to one count of operating an unauthorized money-transmitting business. The business, which runs one of the biggest cryptocurrency exchanges in the United States, is still active. US District Judge Katherine Polk Failla in Manhattan presided over the guilty plea and ordered the punishment.
US Attorney Matthew Podolsky said:
“For more than 7 years, OKX actively broke anti-money laundering regulations and ignored to put in place protective measures against criminals misusing our financial system.”
The lawyer stated that over the years, the exchange allowed illegal earnings totalling over $5 billion through fraudulent trades. OKX will conclude its lengthy investigation with the regulator by paying $84 million in criminal penalties. The parent business has also decided to give up a charge of $421 million.
FBI: "OKX Violates U.S. Law Flagrantly"
In the United States, the exchange has been attracting users from New York and other states since 2017. But according to OKX's stated policy, US consumers are not allowed to deal on the exchange.
FBI's James E. Dennehy pointed out:
“OKX openly broke US law for years by actively looking for clients in the US, including here in New York, and even going so far as to advise people to give false information in order to get around necessary processes.”
The DOJ report claims that from 2018 until the beginning of 2024, the exchange served US clients without the required registration. Therefore, more than $1 trillion worth of transactions on OKX engaged US retail and institutional consumers. Trading fees and earnings for OKX totalled hundreds of millions of dollars as a result of transactions from those US clients.
Workers Manipulated Clients
According to court documents, OKX enabled US clients to trade through third parties without having to go through the KYC procedure. Also, investigations showed that the exchange staff occasionally "advised customers" on how to give fake information in order to get around the business's KYC procedure.
In particular, OKX staff encouraged US clients to provide a fake national ID number and any random country. The exchange just declared that it had been granted Europe's new MiCA license to operate in the area. OKX has been approved to offer fully legal cryptocurrency products in all 28 member states of the European Economic Area.
