The OKX cryptocurrency exchange, one of the world’s largest, pleaded guilty on Monday to processing more than US$1 trillion (HK$7.8 trillion) in transactions by US customers without a license and will pay more than US$504 million in penalties.

The exchange, which allows users to make spot trades in more than 300 cryptocurrencies including Bitcoin and Ethereum, admitted in Manhattan federal court to a single felony count of operating an unlicensed money transmitting business.

US District Judge Katherine Polk Failla assessed the penalty in fines and forfeitures, following an agreement between US prosecutors and the exchange owner, the Seychelles-based Aux Cayes Fintech.

“Today’s settlement contained absolutely no charges of money laundering,” said David Meister, outside counsel for OKX. “Aux Cayes FinTech, one of many OKX affiliates, resolved a Department of Justice investigation by acknowledging that it had not obtained a license to operate as a money transmitter.”

OKX admitted that from about 2018 to early 2024, its platform engaged in more than US$1 trillion in US-based transactions while failing to register as a money services business. For years, OKX allowed people to use its platform without completing a “know-your-customer” process, and did not implement measures to monitor and detect suspicious activity, prosecutors said.

Although OKX’s official policy prevented people in the US from trading on its exchange, they could still do so by using a virtual private network and not disclosing their identity, the government said. The company also promoted on social media that it allowed trades without requiring identifying information.

Internal documents and messages cited in the plea agreement show that OKX knew about US customers using its exchange, and worked to attract and retain certain “US institutional customers.” One such customer conducted approximately US$1.2 trillion in spot and derivatives transactions from around 2019 to 2023.

Launched in 2017 by entrepreneur Star Xu, OKX is one of the largest crypto exchanges by daily trading volume. It was originally named OKEx and rebranded to OKX in 2022.

The guilty plea comes as the US Securities and Exchange Commission started retreating from the policies of former Chair Gary Gensler, who led a number of investigations and lawsuits against crypto companies.

Coinbase announced on Friday that the SEC agreed, pending commissioner approval, to drop its lawsuit accusing the firm of running an illegal exchange. Robinhood Markets and nonfungible-token marketplace OpenSea also said the SEC closed investigations into their crypto businesses, following Coinbase’s announcement.
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OKX to pay US$500m after guilty plea for crypto crime