DOJ Targets OKX’s Affiliate for Violating AML Regulations, Ignoring US Restrictions

OKX affiliate –  Aux Cayes FinTech Co. Ltd – pleaded guilty today to one count of operating an unlicensed money-transmitting business under United States anti-money laundering laws.

As part of a settlement with the Department of Justice, the company has agreed to pay over $500 million, which includes an $84 million penalty and the forfeiture of approximately $421 million in fees earned from US customers.

Regulators Crack Down on AML Breaches

According to the official announcement, the investigation found that certain US traders had accessed the company’s global platform due to past compliance gaps. Aux Cayes, however, maintained that these users have since been removed.

While the firm accepted responsibility for its regulatory shortcomings, it noted that the affected users made up only a small portion of its overall customer base. No company employees faced individual charges, and no government-appointed monitor was imposed as part of the resolution.

In a bid to improve its regulatory framework, OKX’s Aux Cayes voluntarily enlisted a compliance consultant to address deficiencies and strengthen oversight, a measure it plans to continue.

“As the DOJ noted in the agreement resolving the case, the Company cooperated with the DOJ; the company appreciates their collaboration on this resolution. OKX prides itself in being a trusted crypto venue for millions of people around the world, consistently upholding local laws and regulations in all countries in which we operate. We began as a start-up, and over time we have taken affirmative action to address potential gaps, which is the spirit of the Company’s decision here.”

Seven Years of Regulatory Failures

Meanwhile, US Attorney Matthew Podolsky called out OKX for its continuous noncompliance with the country’s anti-money laundering laws and stated that the exchange knowingly failed to implement necessary safeguards for over seven years. As a result, the platform reportedly facilitated more than $5 billion in suspicious transactions and illicit proceeds, thereby exposing vulnerabilities in the financial system.

The authorities also slammed the company for actively circumventing Know Your Customer (KYC) regulations. They shed light on how its employees advised US customers on how to falsify information to bypass restrictions.

In April 2023, an OKX employee instructed a US customer to enter a fake nationality and ID number. The same employee, in January 2024, messaged a prospective US customer, asking if they had found any alternative way to complete KYC verification from outside the country.

Despite officially banning US users, OKX advertised in the States, sponsoring events like the Tribeca Film Festival and using affiliate marketers to attract customers. The company also incentivized existing users to recruit others, with at least one customer creating a public guide on using a VPN to access the platform. Additionally, OKX actively catered to institutional clients in the country, one of which conducted over a trillion dollars in transactions.

This isn’t the first time OKX has been embroiled in legal troubles over permissions and licenses. Last February, South Korea’s Financial Intelligence Unit (FIU) reportedly received complaints from the Digital Asset Exchange Association (DAXA) over the crypto exchange’s improper registration in the country.