Although there were no allegations against employees or harm to customers, OKX still proactively cooperated to settle with the US government.
OKX reached an agreement with the US Department of Justice, agreeing to pay a $505 million fine. Image: BitcoinWorld
Reasons Leading to the DOJ Investigation
The Bit exchange OKX announced that it has reached an agreement with the US Department of Justice (DOJ), following an investigation related to the company's activities in the US market. Accordingly, OKX will pay a fine of $84 million and forgo $421 million in transaction fees collected from US customers, mainly from the institutional client base.
We cooperated with the US Dept of Justice in their thorough investigation of our business. We had a small percentage of customers who were able to use our international services due to historical compliance gaps. Today our compliance controls are among the leading in the… pic.twitter.com/sg1b2GC4wE
— OKX (@okx) February 24, 2025
Aux Cayes FinTech Co. Ltd., a subsidiary of OKX, was investigated for operating in the US without proper licensing. The DOJ accused OKX of operating an unlawful money transmission business, allowing US customers to trade on its global platform without fully meeting the legal requirements in this country.
Although OKX had a policy prohibiting US customers from trading since 2017, the DOJ found that the exchange still actively attracted customers there. Initially, OKX required users to provide identity verification (KYC) information to trade, but the DOJ said the company's employees had instructed customers to provide false information. One example cited by the DOJ was an OKX employee advising a US customer: "I know you're in the US, but you can enter a random country, like the UAE, and fill in a fake ID number."
Additionally, OKX advertised in the US, sponsored the Tribeca Film Festival, and allowed users to promote the trading platform. At least one customer had posted a video instructing how to register on OKX using a VPN to conceal their actual location.
James E. Dennehy, the FBI Assistant Director in Charge of the New York Field Office, accused OKX of "openly" violating US laws and suggesting users provide false information to bypass necessary procedures. He emphasized that by not complying with regulations, this platform had missed many illicit transactions, contributing to other criminal activities.
However, the DOJ did not bring any charges against OKX employees and did not confirm that the company had caused harm to customers. Nevertheless, to resolve the case, OKX proactively cooperated with the investigation and agreed to pay the fine as well as forgo the funds collected from US customers during the period in question.
The Agreement Between OKX and the DOJ
Under the agreement with the US Department of Justice, OKX agreed to:
Pay a $84 million fine for violating regulations related to unlicensed money transmission activities.
Forfeit $421 million in transaction fees collected from US customers during the investigation period.
Commit to future legal compliance and implement stricter control measures to prevent US customers from accessing their platform without proper licensing.
OKX stated that this agreement is part of the company's long-term strategy to ensure global regulatory compliance, as well as to strengthen customer trust in its platform.
OKX Commits to Compliance
In its latest statement, OKX emphasized that they are working to improve compliance, transparency, and security for users, and fully accept responsibility for past shortcomings.
The company has committed to:
Provide a safe, legal, and trustworthy platform.
Closely cooperate with regulatory authorities to ensure legal compliance.
Develop new solutions to help the crypto market grow in a sustainable manner.
According to OKX, resolving this issue not only helps them comply with US laws but also sets the stage for the company to continue expanding its operations and driving global crypto adoption.
OKX's agreement with the DOJ comes against the backdrop of a more open legal environment for the crypto industry in the US. Recently, the US Securities and Exchange Commission (SEC) has officially concluded investigations into Robinhood and OpenSea.
The Coinbase exchange also announced that the SEC has agreed to dismiss the lawsuit against the company, a signal that legal pressure on crypto platforms is gradually easing.
Compiled by Coin68
