Aux Cayes FinTech Co. Ltd. (OKX Seychelles, hereinafter referred to as "the company"), a subsidiary of OKX, reached a settlement with the U.S. Department of Justice today, acknowledging that the company had conducted money transmission business in the U.S. without a license. In the investigation of this case, the company acknowledged that due to historical deficiencies in compliance controls, a small portion of U.S. customers had previously traded on the company's global platform.
The number of U.S. customers involved only accounted for a small portion of the company's global customer base, and these U.S. customers have now all been withdrawn. In this settlement, there were no allegations of customer harm, no charges against any company employees, and no appointment of a government monitor. To reach this settlement, the company agreed to pay a fine of $84 million and forgo approximately $421 million in revenue from U.S. customers, the majority of which came from a small number of institutional clients.
When the company became aware of these deficiencies, we proactively hired a compliance advisor to help resolve the issues and improve the compliance system, and we plan to continue working with this advisor in the future. As the U.S. Department of Justice noted in the settlement agreement of this case, the company cooperated with the U.S. Department of Justice and expressed gratitude for the assistance provided.
OKX is proud to be a cryptocurrency platform trusted by tens of millions of people worldwide, and we strictly comply with local laws and regulations in all the countries where we operate. We started as a startup, and over time, we have taken proactive measures to address our shortcomings, which is also reflected in this settlement.
We are satisfied with this settlement result and look forward to continuing to expand our global business footprint, while maintaining OKX's position as the world's most trusted and technology-driven cryptocurrency platform.
Prior to this settlement, OKX has also made significant progress in establishing a strong compliance infrastructure: this settlement marks OKX's continued commitment to building an excellent compliance system, deepening regulatory cooperation, and promoting the credibility of the entire cryptocurrency industry. This settlement reflects our growth and allows OKX to continue working with regulators to provide customer-beneficial solutions for the entire cryptocurrency market.
Commitment to Compliance
At OKX, compliance is at the core of our business operations, and we take the responsibility of establishing a high-standard compliance system very seriously. Over the past two years, OKX has built and continuously invested in a rigorous, risk-based global compliance system, which includes a series of key initiatives to strengthen regulatory, platform security, and the overall effectiveness of the compliance system:
• Enhancing our global customer identification (KYC) system and customer risk rating (CRR) system to identify and assess customer risk profiles throughout the entire customer lifecycle, from registration to activities on the platform.
• Expanding the enhanced due diligence (EDD) program to better mitigate potential high-risk factors within the exchange.
• Deploying industry-leading anti-money laundering (AML) and sanctions tools, including our own detection systems and behavior-based transaction monitoring systems (TMS), for real-time and post-event detection to curb various illegal activities.
• Establishing a team of over 150 financial crime and on-chain investigation professionals with extensive law enforcement and regulatory experience, actively collaborating with law enforcement agencies worldwide.
• Implementing advanced geofencing and tracking technologies to combat potential fraud and attempts to circumvent compliance controls.
• Integrating multiple third-party solutions, as we firmly believe in providing customers with an open, fair, and transparent market.
These measures ensure that OKX remains at the forefront of compliance in the evolving global regulatory environment, and enable the company to continuously drive the building of trust and integrity within the cryptocurrency ecosystem.
Global Regulatory Cooperation and Future Outlook
OKX is committed to ongoing compliance building, providing regulatory-compliant products and services across multiple jurisdictions globally. The company also maintains close cooperation with global law enforcement agencies, and its achievements in combating cryptocurrency-related financial crimes, terrorist financing, and sanctions evasion have been widely recognized.
As the cryptocurrency industry continues to evolve, OKX, while pushing for innovation, focuses on compliance building, setting a benchmark for the industry in terms of transparency, compliance, and user safety. The company takes full responsibility for its past shortcomings and is committed to continuous progress - creating a safe, compliant, and trustworthy platform for global customers, employees, and partners.
