OKX Reaches DoJ Settlement, Pays $504 Million

OKX announced today that it reached a settlement with the US Department of Justice (DoJ), closing previous investigations. It pled guilty to several charges and will pay over $504 million.

The exchange depicted this settlement as a casual misunderstanding, but the DoJ’s own press release referred to its “flagrant violations” and “blatant disregard.”

OKX Settles with the DoJ

OKX, one of the world’s leading crypto exchanges, has been clearing house on its global regulatory compliance issues. On one hand, it secured a MiCA license for EU operations last week. Now, the exchange is progressing towards new compliance in the US, announcing a settlement with the DoJ:

“We cooperated with the US Department of Justice in their thorough investigation of our business. We had a small percentage of customers who were able to use our international services due to historical compliance gaps. Today our compliance controls are among the leading in the industry. This matter is now behind us,” the firm claimed on social media.

According to the announcement, the exchange acknowledged that it allowed some US customers to trade on its platforms without proper licensing. OKX agreed to pay a fine of $84 million and forfeit $421 million in user fees. This concludes a saga of year-long investigations into the firm.

The US government’s financial regulatory apparatus is changing its attitude towards crypto, but frictions remain. The DoJ itself emphasized that the firm pled guilty to serious offenses. Quoting various officials, the DoJ referred to OKX’s “flagrant violations” and “blatant disregard” in its conduct.

It seems that the DOJ’s attitude towards the crypto industry will remain distinct from other federal regulators. In the last week alone, the SEC dropped a major lawsuit against Coinbase and quietly dismissed a probe into Robinhood’s potential misconduct. It also ended an investigation against NFT marketplace OpenSea.

OKX’s settlement involves an actual fine and guilty plea, which is more than these institutions can claim.

Nonetheless, OKX should be quite pleased with this settlement. It earned over $1.5 billion in revenue last year, and it has substantial asset holdings and trade volumes.

Although $504 million is a hefty price to pay, it is a worthwhile fee to regain the US regulator’s good graces.