OKX Agrees Settlement Plan with the DOJ, Pays Over $500 Million in Penalties

The Seychelles-based operator of cryptocurrency exchange OKX, Aux Cayes FinTech Co. Ltd, has agreed to pay about $505 million in penalties to resolve charges of running an unlicensed money transmitting business and violating U.S. Anti Money Laundering laws.

The settlement, announced by the U.S. Department of Justice in a blog post on February 24, includes a $84 million penalty and $421 million in forfeited fees which the DOJ says the exchange got from U.S. clients.

The charges are as a cumulation to a two year investigation into OKX’s failure to register as a money services business and implement adequate safeguards against illicit financial activity.

DOJ Slams OKX Disregard for U.S. AML Laws

Acting U.S. Attorney Matthew Podolsky accused OKX of knowingly facilitating over $5 billion in suspicious transactions from the U.S., including proceeds from criminal activities, between 2018 and early 2024.

FBI Assistant Director James E. Dennehy also further alleged that OKX advised users to submit false information to bypass compliance checks.

“Blatant disregard for the rule of law will not be tolerated, and the FBI is committed to working with our partners across government to ensure that corporations that engage in this type of conduct are held accountable for their actions.” Dennehy stated.

The DOJ revealed that OKX lacked adequate systems to monitor suspicious transactions or screen for sanctioned entities until May 2023. They further accused the exchange of relying on outdated tools, and failing to implement commercially available anti-money laundering software.

Moreover, OKX’s official ban on U.S. customers proved ineffective according to the DOJ. Despite the company implementing an IP ban on American citizens, the company still continued servicing U.S. institutional clients, who easily bypassed the ban using widely available VPNs.

OKX Settles the DOJ

Under the terms of the agreement, OKX will pay $84 million in direct penalties to the DOJ and give up $421 million in fees linked to U.S. based transactions. According to the DOJ, the forfeited funds represent profits generated from American customers, despite the exchange barring U.S. users since 2017.

Investigators at the DOJ found that OKX actively courted large U.S. institutional clients, some of which executed over $1 trillion in spot and derivatives trades on the platform. These trades reportedly provided significant liquidity and trading volume, helping OKX grow into one of the world’s largest crypto exchanges.