OKX Parent Company Pleads Guilty To Compliance Failures, Receives A $500 Million Fine
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Aux Cayes FinTech Co. Ltd, a parent company of the popular crypto exchange OKX, recently pleaded guilty to compliance failures identified in an investigation led by the US Department of Justice (DOJ).
The firm admitted to operating an unlicensed money-transmitting business, which violated the US AML laws. Following this, it managed to reach a settlement with the authorities, agreeing to pay $500 million in penalties.
The DOJ-led investigation resulted in $84 million in penalties and the forfeiture of $421 million in fees, which were earned from institutional clients who used the platform for trading.
Some Of OKX’s US Clients Accessed Its Global Platform
OKX also admitted that its previous compliance failures allowed some of its US users to trade on its global platform, even though this is prohibited by standing US regulations. However, the exchange also argued that these affected users only represent a small fraction of its total client base.
It claims that it corrected this mistake after becoming aware of it, and so none of the US customers can be found on its global platform today. Furthermore, none of its customers have come to harm due to this oversight, and no charges were filed against its individual employees. Moving forward, OKX intends to work with a compliance consultant to ensure that things like that will not happen again and that its regulatory protocols are improved.
The platform’s CEO, Star Xu, stated that the company’s vision is to make OKX the gold standard of global compliance at scale across different markets and their respective regulatory bodies.
Before that, in August last year, Star Xu also said that the exchange intends to terminate user accounts that are found engaging with sanctioned entities, such as Garantex or Tornado Cash. He also clarified that any accounts that are caught depositing funds from sanctioned entities, or sending them to one of these platforms, would trigger compliance risk controls, which would result in account closure.
