Seychelles based crypto exchange OKX admitted its money-transmitting business lacked the necessary license and accepted a payment of $504 million penalty.

The U.S. Attorney”s Office declared another important step against cryptocurrency exchanges who avoid supervised operations by demanding $504 million from OKX.

From 2017 to 2024 OKX publicly refused to serve US entities while secretly facilitated more than $5 billion in trades from US users. Prosecutors found that OKX let Americans trade and helped U.S. clients use its poor security system as a workaround.

OKX Staff Instructed Users to Submit False Information

According to Acting U.S. Attorney Matthew Podolsky OKX broke US laws repeatedly during many years by looking for US customers who tried to evade necessary procedures with made-up information.

Employees from the company helped American customers enter wrong personal details to create their accounts. In their legal complaint exchange staff members instructed their U.S. customer to create false account details and provide incorrect identity information.

The staff member noted that entering data from any nation except the United States will allow the process to work. Customers can enter United Arab Emirates as their country and make up any number for their ID number fields.

The case against OKX matches the 2023 enforcement action taken against Binance which pleaded guilty to similar criminal conduct. Binance received the largest-ever fine of $4.3 billion while Changpeng “CZ” Zhao became a four-month inmate as punishment.

OKX Faces Harsh Penalties for Ignoring AML Regulations

Gridulators step up their monitoring and punishment of crypto businesses that break AML rules and financial rules from the government. Under Department of Justice rules Exchange did not follow proper AML policies to detect billions of illegal transactions.

The Managing Director Podolsky confirmed that OKX disregarded AML rules for a period of seven years and refused to put essential safeguards against financial abuses.

Through its settlement terms exchange must pay $84 million as penalty and forfeit the entire $421 million from its U.S. illegal operations earnings. Most institutional investors sent money through the exchange instead of individual retail traders according to the agreement.

OKX neither revealed the U.S. state where they breached laws nor provided details about their illegal activities within New York”s Southern District which strictly monitors financial wrongdoing.

The deal shows other crypto platforms why they need to follow US financial laws. Legal gray-area exchanges will now face government action matching OKX”s multi-million-dollar penalty and more severe consequences.