Crypto platform OKX has decided to pay over $500 million to settle its dispute with the US department of justice. According to official announcement, the owner of the cryptocurrency exchange OKX, Aux Cayes FinTech Co. Ltd., has admitted to running an unregistered money-transmitting company in violation of US anti-money laundering regulations.
The case alleged that OKX had been running and providing services without proper registration in the USA. However, the settlement now shows that the platform is ready to stay in tandem with rgulators and rules.
DOJ and OKX Reach $500M Settlement
After the US Department of Justice conducted an investigation, OKX’s Aux Cayes FinTech Co. Ltd. agreed to a settlement, paying $84 million in penalties and forfeiting $421 million in fees collected from primarily institutional clients.
Acting U.S. Attorney Matthew Podolsky said, “For over seven years, OKX knowingly violated anti-money laundering laws and avoided implementing required policies to prevent criminals from abusing our financial system.”
They add, “As a result, OKX was used to facilitate over five billion dollars’ worth of suspicious transactions and criminal proceeds. Today’s guilty plea and penalties emphasize that there will be consequences for financial institutions that avail themselves of U.S. markets but violate the law by allowing criminal activity to continue.”
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OKX’s Non-Registered Services: What Had Happened?
Since 2017, OKX has had a formal policy prohibiting transactions on its exchange by individuals in the United States. However, OKX pursued clients in the US, notably in the Southern District of New York, in defiance of this stated policy.
Official records stated that OKX provided services to U.S. retail and institutional clients who transacted more than $1 trillion through the platform between 2018 until at least the beginning of 2024. Those U.S. customers’ transactions brought in hundreds of millions of dollars for OKX in trading fees and profits.
Despite knowing that it was required by U.S. law to register as a money services business with FinCEN since it served retail and institutional customers in the United States, OKX decided not to do so.
DOJ Alleges OKX Of Knowingly Evading Regulations
DOJ in its complaint has alleged that OKX was well aware that Americans could and did readily open and utilize OKX trading accounts, even though the company’s official policy forbade U.S. citizens from conducting business on the exchange.
Retail clients have the option to open an account, receive and transfer cash, and place trades without completing a KYC process from OKX’s launch in roughly 2017 until roughly November 2022.
This implied that OKX, a sizable financial company, facilitated transactions for clients it was unable to identify. Furthermore, OKX recognized that inexpensive, publicly accessible VPN technology could be used to get around the IP Ban, which was a restriction that prohibited users with U.S.-located IP addresses from trading or depositing assets on OKX.
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