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OKX Admits to Unlicensed Operations, Agrees to $505 Million Settlement with US DoJ

OKX Admits to Unlicensed Operations, Agrees to $505 Million Settlement with US DoJ

Aux Cayes FinTech Co. Ltd, OKX's parent company, announced the development.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 25 February 2025 17:37 IST

OKX Admits to Unlicensed Operations, Agrees to $505 Million Settlement with US DoJ

Photo Credit: X/ @okx

Moving forward, OKX pledges full compliance with crypto regulations

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Highlights

OKX was founded in 2017 and is based in Seychelles
In 2024, the exchange exited India for not complying with laws
US DoJ has warned crypto firms against disregarding legal compliance

The OKX crypto exchange has pleaded guilty to operating an unlicensed money transmission business in the US. On February 25, OKX announced a $505 million (roughly Rs. 4,400 crore) settlement with the US Department of Justice (DoJ). The news was shared by its parent company, Aux Cayes FinTech Co. Ltd., which emphasised that no customer harm was alleged during OKX's unlicensed operations.

As part of the settlement, Aux Cayes FinTech paid an $84 million (roughly Rs. 731 crore) penalty and forfeited $421 million (roughly Rs. 3,667 crore) in fees, primarily collected from a small number of institutional clients.

“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. In recognition of these gaps, the company, on its own initiative, voluntarily retained a compliance consultant to help remedy the issues,” the announcement statement said.

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We cooperated with the US Dept of Justice in their thorough investigation of our business. We had a small percentage of customers who were able to use our international services due to historical compliance gaps. Today our compliance controls are among the leading in the… pic.twitter.com/sg1b2GC4wE
— OKX (@okx) February 24, 2025

According to the DoJ, OKX facilitated $1 trillion (roughly Rs. 87,13,829 crore) worth of transactions for US-based retail and institutional clients between 2018 and 2024. The federal agency also said that the exchange knowingly breached US' anti money laundering laws for seven years and played a role in the suspicious movement of over $5 billion (roughly Rs. 43,569 crore) worth of funds. The DoJ has warned crypto firms that blatant disregard for the law will not be tolerated.

“Today's guilty plea and penalties emphasise that there will be consequences for financial institutions that avail themselves of US markets but violate the law by allowing criminal activity to continue. Blatant disregard for the rule of law will not be tolerated,” said Acting US Attorney Matthew Podolsky.

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FBI Assistant Director in Charge James E. Dennehy emphasised that the agency will hold firms accountable for engaging in unlawful conduct.

Meanwhile, OKX has pledged to comply with all crypto-related regulations. The exchange stated that it is strengthening its global KYC processes and expanding Enhanced Due Diligence (EDD) efforts to identify and mitigate risks.

Additionally, the Seychelles-based exchange is establishing an internal intelligence unit to monitor user activity and implementing tools to ensure compliance with sanctions and anti-money laundering laws.

Back in May 2024, OKX had to exit the Indian market over failure to meet legal requirements. The exchange, did however, recently secure its MiCA licence in the EU.

OKX is reportedly the world's fourth-largest cryptocurrency spot exchange, ranking just behind Binance, Bybit, and Coinbase. The ranking is based on factors such as traffic, liquidity, trading volume, and confidence in the accuracy of reported figures.

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