OKX hit with $1.2m fine from Maltese authorities for breaching AML rules: report

Malta’s Financial Intelligence Analysis Unit has ordered OKX to pay a fine of €1.1 million for failing to comply with the nation’s Anti-Money Laundering standards.

According to a recent Bloomberg report, Maltese authorities published a notice that informed the trading platform that it had failed to examine potential money laundering stemming from the products it offered to customers. As a result, the authorities ordered the exchange to pay €1.1 million, or more than $1.2 million.

The notice followed onsite compliance examinations conducted by the FIAU in April 2023, during which several breaches of AML egulations were discovered. The watchdog described these violations as “serious” and “systematic,” particularly regarding the exchange’s Customer Risk Assessment procedures.

“Moreover, the Company was found to have failed to carry out a CRA upon establishing a business relationship for around 50% of the customer files reviewed as part of the compliance examination,” stated the FIAU in a statement.

Authorities also alleged that the crypto firm failed to properly monitor or follow up on cryptocurrency transactions conducted on its platform, transactions that amounted to more than $20 million in value.

A spokesperson for OKX told Bloomberg that the FIAU had acknowledged the platform’s “remedial action out of its own volition” in response to the penalty. However, the FIAU has not responded to a request for further comment.

“Over the past two years, we have implemented a comprehensive compliance program, including technology upgrades, enhanced monitoring, and robust remediation efforts,” said the spokesperson.

On Jan. 23, the crypto exchange secured a pre-authorization license under the Markets in Crypto-Assets or MiCA framework. With the license, OKX received full authorization to offer products and services to over 400 million users from its European hub in Malta.

OKX’s recent legal troubles

The penalty from Maltese authorities is just one of a string of legal and regulatory issues the exchange has faced in recent months. On March 31, the Thailand Securities and Exchange Commission filed a complaint against OKX for operating in the region without a license.

Not only that, the financial watchdog also alleged that the exchange failed to adequately implement Know Your Customer and Anti-Money Laundering protocols. If the accusations are proven true, the exchange could face legal penalties and Thai users will not be able to access the platform.

Earlier in March, European regulators declared that it has begun investigating OKX after hackers allegedly used it to launder stolen funds from a hack on Bybit, which resulted in a loss of nearly $1.5 billion. In response, an OKX spokesperson denied all wrongdoing, stating that the accusations of the exchange’s involvement in money laundering “are inaccurate and preposterous.”

A few days after the inquiry, OKX announced that it would be temporarily suspending its decentralized exchange aggregator service. The exchange stated that it had detected an attempted attack by North Korea’s Lazarus Group to “misuse our DeFi services.”