OKX CEO Addresses User Concerns Over Compliance System Failures

The founder and CEO of the Bitcoin exchange OKX, Star Xu, has apologized to users for unjustified account suspensions. The entrepreneur clarified that these issues were the result of «false positives» in the compliance monitoring system.

According to the exchange’s leader, there are ongoing challenges within these processes, including a «high rate of erroneous judgments and suboptimal information gathering.» He assured that the platform’s team is working diligently to refine these processes.

«One of the major problems for global compliance is ‘false positives,’ where the system mistakenly flags ordinary users as high-risk. Despite the availability of the most advanced databases and technologies in the industry, accurately determining whether an account meets compliance requirements with 100% certainty remains a challenge,» Xu noted.

He revealed that OKX’s global compliance team and risk management group comprise over 600 individuals. Their primary responsibility is to ensure that the platform is not utilized for any illicit activities, including terrorism financing, human trafficking, drug trafficking, money laundering, fraud, and trading abuse, among others.

At the client level, this oversight involves processes such as identity verification (KYC), transaction monitoring, and sanction list checks and market manipulation reviews. Xu pointed out that in some instances, a small number of accounts are deemed high-risk, and their owners may be asked for additional information.

«Regulators tend to push platforms toward more cautious risk management practices. This is why some users, despite being compliant and behaving normally, may still receive extra requests from the team, creating an impression that they are being asked to prove ‘your father is your father,'» the CEO of OKX acknowledged.

It’s worth noting that in April, the Maltese regulator imposed a €1.1 million fine on the cryptocurrency exchange for violations of anti-money laundering rules in 2023.

In February, OKX admitted to operating an unlicensed money transfer business in the U.S. without adhering to KYC/AML regulations, agreeing to pay over $504 million in fines and restitution.