The cryptocurrency exchange OKX has been fined €1.1 million (about $1.2 million) by Malta’s Financial Intelligence Analysis Unit (FIAU) for violating anti-money laundering (AML) laws.
The fine comes after an examination into OKX’s noncompliance with regulations intended to stop the financing of terrorism and money laundering.
OKX Faces Fine For Not Meeting Regulatory Standards
The FIAU’s conclusions pointed out a number of areas in which OKX did not meet regulatory standards.
These included insufficient transaction monitoring for questionable activity and insufficient customer due diligence procedures.
The FIAU’s ruling demonstrates its dedication to upholding Malta’s strict regulations, which are in place to guarantee that cryptocurrency exchanges abide by AML and counter-terrorism financing laws.
The penalty serves as a stark reminder of the heightened scrutiny that cryptocurrency platforms are subject to as global regulators step up their efforts to prevent illegal activity in the digital asset industry.
Also Read: Thailand’s SEC Files Criminal Complaint Against OKX Operator for Unlicensed Crypto Services
OKX Confirms Violation
The violation has been confirmed by OKX, which is apparently improving its compliance measures. The fine underscores the significance of upholding strong regulatory frameworks for cryptocurrency enterprises.
It also draws attention to the changing regulatory environment that platforms need to manage to stay clear of future fines of this kind.
OKX Fine Comes Despite Malta Having Crypto-Friendly Stance
Malta is renowned for its thorough and forward-thinking approach to regulating cryptocurrencies. The nation is a well-liked location for blockchain and cryptocurrency businesses because it has strong regulations in place to regulate the digital asset industry.
One of the most important laws is the Virtual Financial Assets Act (VFA Act), which guarantees consumer safety and transparency by establishing a legal framework for cryptocurrencies and initial coin offerings (ICOs).
Furthermore, Malta’s Financial Intelligence Analysis Unit (FIAU) upholds strict requirements for crypto companies by enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
Additionally, the nation provides transparent licensing guidelines for cryptocurrency service providers, which fosters confidence among businesses and investors.
Malta’s crypto regulations are designed to draw in international companies in the blockchain business by striking a balance between innovation and regulatory control.
FIAU Highlights Issues With OKX’s Global Work
The FIAU stated that during the 2023 compliance examination, the company had prepared a business risk assessment (BRA) to identify potential threats and vulnerabilities.
However, the FIAU found deficiencies in the company’s BRA methodology, which prevented it from properly evaluating the risks related to money laundering and terrorism financing. As a result, the company failed to implement the necessary measures to effectively mitigate these risks associated with international transactions.
Due to the worldwide scope of crypto transactions, which might expose businesses to threats from sources outside of their primary service region, a more comprehensive approach was required.
According to the FIAU’s inquiry, the business had not properly evaluated the risks associated with around half of the client files that were examined during the compliance audit.
Regardless of the customer’s location, comprehensive risk evaluations are necessary to detect any money laundering activities, hence this omission was against anti-money laundering (AML) requirements. Failure to do so resulted in the penalty being applied.
Also Read: OKX Halts DEX Aggregator Activity Following Cybersecurity Threat from Lazarus Group