OKX resolves US DOJ investigation, agrees to pay around $504m in penalties
The US Department of Justice (DOJ) announced last week that Aux Cayes FinTech, the Seychelles-based operator of the OKX crypto exchange, pled guilty to “one count of operating an unlicensed money transmitting business” in the US, and has agreed to pay monetary penalties of more than $504 million.
OKX operator Aux Cayes FinTech resolves DOJ investigation
Founded in 2017, OKX is one of the world’s largest crypto exchange platforms, providing users with access to over 300 different currencies and processing billions of dollars’ worth of transactions daily.
In a statement, the US Attorney’s Office in the Southern District of New York writes: “Since 2017, OKX has had an official policy preventing US persons from transacting on its exchange. But contrary to this official policy, OKX sought out customers in the United States, including in the Southern District of New York.”
The statement continues: “From in or about 2018 through in or about at least early 2024, OKX served US retail and institutional customers that engaged in over one trillion dollars’ worth of transactions through OKX. Transactions from those US customers generated hundreds of millions of dollars in trading fees and profits for OKX.”
The DOJ alleges that OKX “knew it was required by US law to register as a money services business with FinCEN” as a result of serving retail and institutional customers in the US, but “chose not to do so”.
The DOJ claims that from its founding in 2017 to November 2022, OKX “allowed retail customers the option to create an account, receive and transfer funds, and place trades without completing a KYC process”, alleging that this meant the exchange “facilitated transactions on behalf of customers that it could not identify”.
“For over seven years, OKX knowingly violated anti-money laundering laws and avoided implementing required policies to prevent criminals from abusing our financial system,” comments acting US attorney Matthew Podolsky.
“As a result, OKX was used to facilitate over five billion dollars’ worth of suspicious transactions and criminal proceeds,” Podolsky continues.
In a statement posted to its website, Aux Cayes FinTech says it has “resolved a Department of Justice investigation by acknowledging that it had not obtained a license to operate as a money transmitter”.
“In resolving the case, the Company acknowledged that, as a result of legacy compliance gaps, certain US customers had in the past traded on the company’s global platform,” Aux Cayes FinTech says.
Aux Cayes FinTech adds: “The total number of US customers involved – which are no longer on the platform – amounted to a small percentage of the Company’s worldwide customer population. There were no allegations of customer harm, no charges against any Company employee and no government appointed monitor as part of the settlement.
“To resolve the issue, the Company agreed to pay a penalty of $84 million, and to forfeit fees earned from these US customers over the period, which was approximately $421 million, a majority of which comes from a few institutional clients.
“In recognition of these gaps, the Company, on its own initiative, voluntarily retained a compliance consultant to help remedy the issues and enhance its overall compliance program, and plans to continue with this consultant into the future. As the DOJ noted in the agreement resolving the case, the Company cooperated with the DOJ; the company appreciates their collaboration on this resolution.”
