The cryptocurrency exchange OKX has reached a settlement with US authorities over licensing violations and will pay a $500 million fine.
Settlement and Fines
As part of the settlement with the US Department of Justice, OKX, through its affiliate Aux Cayes FinTech, has agreed to pay over $500 million in penalties and forfeitures. This includes a criminal forfeiture of $420.3 million from fees earned from US-based customers and an $84.4 million criminal fine.
Criticism and Violations
Officials stated that the company allowed illicit transactions on its platform and failed to enforce proper compliance measures. OKX actively sought US customers despite lacking a license to operate in the country. FBI Assistant Director James E. Dennehy criticized the exchange. "CITE_W_A": "For years, OKX flagrantly violated US law, actively seeking customers in the United States—including here in New York—and even advising individuals to provide false information to circumvent requisite procedures," Dennehy said.
Historical Context and Market Reaction
According to the DOJ, these violations spanned from 2018 to early 2024, during which OKX facilitated over $1 trillion in US-based transactions without proper registration. Although the company did not voluntarily disclose its violations, it cooperated with the investigation, leading to a 25% reduction in the fine. Prosecutors noted that the company began implementing remedial measures since 2022.
The case against OKX is part of a broader crackdown on the crypto industry by US regulators. Despite hefty fines, regulatory standards continue to be a significant topic of discussion.