OKX Fined €1.1 Million by Malta for Anti-Money Laundering Breaches

OKX, a prominent cryptocurrency exchange, has been fined €1.1 million, equivalent to $1.2 million, by Malta’s Financial Intelligence Analysis Unit (FIAU) for breaching anti-money laundering laws. The FIAU, which regulates exchanges, concluded that OKX’s risk assessment process did not adequately account for potential money laundering risks associated with their products. The regulator found that only half of new clients were screened, raising concerns about insufficient assessment during client acquisition. Additionally, the FIAU highlighted issues with external reporting and record-keeping, which are critical for preventing money laundering.

This fine comes amidst a series of regulatory challenges for OKX. In February, Bybit, another crypto exchange, accused OKX of having technology that facilitated hackers in laundering stolen money. Bybit suffered a $1.5 billion breach, with hackers using various exchanges to hide their actions. Ben Zhou, Bybit CEO, claimed that OKX enabled the hackers to move 40,233 ETH, worth around $100 million, to more anonymous wallets. OKX refuted these claims, stating that Zhou was spreading misinformation and that there was no investigation by European Union regulators.

In February, U.S. regulators fined OKX $500 million for not implementing proper procedures for registering money transfers. This incident suggests that OKX is facing scrutiny from various regulatory bodies. In March, Thailand brought a criminal complaint against OKX for operating an exchange without registering with the appropriate authorities. Despite these challenges, OKX has been actively expanding its business in Europe. In January, it became one of the first crypto exchanges to obtain a license from the European Union’s Markets in Crypto Assets (MiCA). This license is crucial for OKX to expand its operations throughout Europe, allowing European customers to deposit or withdraw Euros without a fee. The service is integrated with local businesses, enhancing versatility for European customers.

OKX has also taken steps to improve its compliance and legal standing. Earlier this year, it was penalized €304,000 by Malta’s Financial Services Authority for non-compliance. The fine required OKX to seek outside help in auditing its business structures. In response, OKX employed Linda Lacewell as its chief legal officer. Lacewell, who previously worked in the New York Department of Financial Services, advised OKX during their legal battles. Her expertise in modernizing cryptocurrency frameworks and her interest in cybersecurity and financial crime make her a valuable addition to OKX’s team. Lacewell aims to improve OKX’s regulatory standards, making the exchange better suited to the global market and taking a lead in legal frameworks.