Malta’s financial watchdog has fined the cryptocurrency exchange OKX a hefty €1.054 million ($1.155 million) for serious anti-money laundering (AML) violations.
Failing Compliance Checks
The Financial Intelligence Analysis Unit (FIAU) found OKX lacking in several key areas. The investigation, conducted in 2023, revealed that OKX failed to properly assess money laundering and terrorist financing risks associated with its services. A significant issue was the lack of proper customer risk assessments (CRAs). The FIAU reported that for roughly half of the customer accounts reviewed, OKX didn’t perform a CRA before the customer deposited significant funds, sometimes thousands of dollars. These CRAs were often conducted months after the initial account setup.
Improvements, But Still a Fine
While the FIAU acknowledged that OKX has made significant improvements over the past 18 months, the regulator deemed the past failures “serious and systematic,” justifying the substantial fine. This comes despite OKX receiving its EU Markets in Crypto Assets (MiCA) license from Malta earlier this year. MiCA is a new EU law aimed at better regulating crypto, including stronger measures against financial crime.
More Regulatory Trouble for OKX
This isn’t OKX’s only recent regulatory headache. The exchange has also faced scrutiny for its involvement with a decentralized exchange (DEX) aggregator. In February, hackers stole over $1.4 billion in crypto from Bybit, and investigators linked the stolen funds to OKX’s DEX aggregator. OKX temporarily suspended its DEX aggregator service after this incident.
The Bottom Line
OKX is facing significant financial and reputational damage from these regulatory actions. The large fine highlights the increasing importance of AML compliance in the crypto industry.
