OKX Pleads Guilty to Illegally Operating in the US: Pays $505 Million

Crypto exchange OKX has pleaded guilty and settled with the US Justice Department by paying more than $504 million for offering services to US-based clients without obtaining a money transmitter license. The settlement was made with Seychelles-based Aux Cayes Fintech, which operates as OKX.

A Heavy Price for Operating Illegally in the US

According to an OKX press release, the crypto exchange agreed to pay an $84 million penalty, while the remaining $421 million to be returned was the fees it earned from providing services to US customers. It further highlighted that the majority of the fees came from “a few institutional clients.”

Although OKX did not specify the US state where it violated the provisions, a separate DoJ announcement highlighted that “OKX sought out customers in the United States, including in the Southern District of New York.”

“For over seven years, OKX knowingly violated anti-money laundering laws and avoided implementing required policies to prevent criminals from abusing our financial system,” said Acting U.S. Attorney Matthew Podolsky. “As a result, OKX was used to facilitate over five billion dollars’ worth of suspicious transactions and criminal proceeds.”

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

Ignoring Compliance Measures

The DoJ announcement detailed that OKX has been onboarding US clients since at least 2017, despite its official policy of “preventing U.S. persons from transacting on its exchange.” The exchange served both retail and institutional clients in the US from about 2018 until early 2024, handling over a trillion dollars’ worth of crypto transactions.

Prosecutors further alleged that the Seychelles-based exchange intentionally ignored the requirement to register as a money services business with FinCEN. “Despite OKX’s official policy prohibiting U.S. persons from transacting on the exchange, OKX was fully aware that individuals in the United States could, and did, easily create and use OKX trading accounts,” the DoJ announcement noted. One OKX employee even guided US-based customers on ways to circumvent the country’s restrictions by simply lying about their country of residence.

The exchange also advertised its services in the US, sponsored a local event, and used US-based affiliate marketers to promote its exchange. Prosecutors further found that the exchange did not use commercially available software to monitor and detect suspicious activity, including money laundering, until about May 2023. It also had no controls to determine whether transactions were linked to sanctioned regions.

Meanwhile, OKX is now focused on establishing its European presence after the implementation of MiCA framework.