OKX, one of the largest cryptocurrency exchanges, settled with U.S. authorities over failing to obtain a license to operate as a money transmitter, the exchange announced Monday.
Aux Cayes FinTech Co. Ltd., an OKX affiliate, is the specific party that settled with the U.S. Department of Justice, paying over $500 million in penalties and forfeited fees, a press release said.
OKX failed to secure a money transmitter license, the exchange said, without detailing which state the license might have been issued from. A DOJ press release said “OKX sought out customers in the United States, including in the Southern District of New York.”
A person familiar with the situation told CoinDesk that the settlement resolved allegations of fraudulent and non-compliant activities at the exchange that took place in past years.
The DOJ’s press release said OKX facilitated more than $5 billion in “suspicious transactions and criminal proceeds,” citing Acting U.S. Attorney Matthew Podolsky.
OKcoin, the American division of OKX, also received a subpoena issued by the Commodity Futures Trading Commission (CFTC) on Feb. 24 last year. CoinDesk saw the cover page of the subpoena, which refers to “Certain persons engaged in fraud and other unlawful conduct with respect to digital asset transactions.”
A second person said the CFTC probe into OKcoin relates to last year’s flash crash of the exchange’s native token following the sudden drop in the price of the OKB token on Jan. 23, 2024. OKX told users they would be compensated for losses resulting from the crash.
An internal document circulated to OKX staff in January 2024 highlighted “a new ethics and compliance helpline to provide a confidential and secure space for you to bring up concerns or issues about ethical conduct, policy violations or suspected illegal behavior.”
OKX representatives did not immediately respond to requests for comment. A CFTC spokesperson declined to comment.
UPDATE (Feb. 24, 2025, 21:35 UTC): Adds additional information.