OKX , a crypto exchange, has been fined €1.1 million, equivalent to $1.2 million, by Malta’s financial regulator for breaching anti-money laundering laws. Malta’s Financial Intelligence Analysis Unit (FIAU) regulates exchanges. The FIAU concluded that there were many financial violations with OKX, forming a systematic pattern that could not be ignored. The FIAU claimed that OKX’s risk assessment process did not account for the possible money laundering risks associated with their products. FIAU argued that there was insufficient assessment when new clients were being acquired, finding that only half were screened. The FIAU further raised concerns about external reporting and the lack of record-keeping. These were issues that occupied FIAU the most, focusing on anything that may allow or facilitate money laundering. Before the FIAU assessment in March, Bybit accused OKX of having technology that enabled hackers to launder stolen money easily. In February, Bybit suffered a $1.5 billion breach by hackers who used various exchanges to hide their actions. Ben Zhou, Bybit CEO, accused OKX of enabling the hackers, through web3 proxies, to move 40,233 ETH, worth around $100 million, to more anonymous wallets. He also claimed that European Union regulators were investigating the incident. OKX hit back at the claims, saying that Zhou was spreading misinformation and that there was no such investigation. In February, U.S. regulators fined OKX for not implementing proper procedures for registering money transfers, fining the parent company $500 million. The incident could be confirmation that OKX is facing scrutiny from a range of regulatory committees, or it could just mean that OKX got caught up in the crosshairs of the previous administration’s ‘war on crypto. ’ In March, Thailand brought a criminal complaint against OKX for operating an exchange without registering their actions with the appropriate authorities. OKX, meanwhile, has been trying to grow 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). OKX obtained its license while operating in Malta, the exchange’s main department for European operations. Since then, it has obtained its MiCA II license, further expanding its business model. The license is essential for the business to expand throughout Europe. The MiCA license allows European customers to deposit or withdraw Euros without a fee. The service is integrated with local businesses, such as those using credit cards, banking services, and local transfers. As a result of such integrations, OKX has become more versatile for European customers, with extended options to view a local currency alongside other European currencies. There is also a team of multilingual help desk workers. OKX, earlier this year, was penalized €304,000 by Malta’s Financial Services Authority for its lack of compliance. The fine required that OKX seek outside help auditing their business structures, specifically focusing on improving their legal standing. OKX responded to these requirements by employing Linda Lacewell as its chief legal officer. Lacewell worked in the New York Department of Financial Services and advised OKX during their legal battles. OKX, by employing Lacewell, shows a positive regard for legal structures and is making an effort to increase the accountability of the exchange. When working for the New York Department of Financial Services, Lacewell modernised the state’s cryptocurrency framework. She also has an interest in cybersecurity and financial crime. Lacewell plans to combine regulation and innovation without compromising the business standards. She aims to improve OKX’s regulatory standards so that the exchange is better suited to the global market, taking a lead in legal frameworks and taking on board the advice given by Maltese financial regulators.
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