Crypto Exchange OKX To Pay $505 Million Fine After Admitting To Breaking US AML Laws
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Aux Cayes Fintech, the operator of the popular crypto exchange OKX, recently pled guilty to one count of operating an unlicensed money-transmitting business. In doing so, the company admitted to breaking US anti-money laundering (AML) laws, and will now have to pay a fine of around $505 million.
As mentioned, OKX is one of the largest and most popular crypto exchanges in the industry, processing billions of dollars worth of crypto transactions every day. The exchange has been around for years, but it has not served US customers.
This has been a part of its official policy since 2017 when it announced that US users would not be allowed to transact on its platform. However, according to the US Department of Justice, OKX sought out US customers contrary to this policy.
It served both institutional and retail users, and their participation in trading on the OKX platform exceeded a trillion dollars in transactions. The transactions generated hundreds of millions in trading fees, enabling OKX to profit directly from their trades.
OKX Allowed Users To Trade Without Completing KYC
The platform did it without registering with FinCEN as a money services business, which it was required to do by law. It even allowed US retail customers to create accounts and transfer or receive funds without completing the KYC process for years.
They could also place trades without completing these procedures, and when the situation changed and they were forced to complete the KYC procedure to continue using the platform they were allegedly advised by OKX employees to provide false information if they wanted to circumvent the process.
According to US attorney Matthew Podolsky, OKX has been violating AML laws for seven years, avoiding the requirement to implement the necessary processes that would prevent criminals from abusing the financial system. Because of this, the exchange used to facilitate more than five billion dollars’ worth of suspicious transactions and criminal proceeds, as Podolsky concluded.
