The operator of the OKX cryptocurrency exchange has admitted to breaking anti-money laundering (AML) laws.
As part of the plea, Aux Cayes FinTech — doing business as OKX — will pay more than $504 million in fines and fees, the U.S. Department of Justice said Monday (Feb. 24).
“For over seven years, OKX knowingly violated anti-money laundering laws and avoided implementing required policies to prevent criminals from abusing our financial system,” Acting U.S. Attorney Matthew Podolsky said in a news release.
“As a result, OKX was used to facilitate over five billion dollars’ worth of suspicious transactions and criminal proceeds.”
OKX, one of the world’s largest crypto exchanges, had been accused of violating its own policy of allowing people in the U.S. trade on its platform. Prosecutors also said the platform was used to carry out more than $5 billion of suspicious transactions and criminal proceeds.
And even after the company began requiring customers to provide know-your-customer (KYC) information to trade, prosecutors say employees would advise users on how to give false information to get around the KYC process and the prohibition on U.S. users.
In one instance, the release said, an OKX employee encouraged a potential U.S. customer to open an account by providing false information about their nationality: “I know you’re in the US, but you could just put a random country and it should go through. You just need to put Name, nationality, and ID number. You could just put the United Arab Emirates and random numbers for the ID number.”
In a statement issued following the plea, OKX said the improper trades by American customers were the result of “legacy compliance gaps,” adding that these customers are no longer part of the platform, and had been a small slice of its overall user base.
The plea comes as other crypto exchanges are seeing U.S. government legal action against them go away.
For example, the financial platform Robinhood announced earlier this week that the Securities and Exchange Commission (SEC) had concluded an investigation into its crypto exchange and had no plans to follow up with enforcement action.
Days earlier, another crypto firm, Coinbase, announced that the SEC was preparing to dismiss its 2023 lawsuit against the company.
“This would be a full dismissal, with $0 in fines paid and zero changes to our business,” CEO Brian Armstrong wrote in a post on social platform X.
