- Cryptocurrency exchange OKCoin Europe fined €1 million by Malta‘s FIAU for anti-money laundering violations.
- The company failed to properly monitor €18 million in transactions and conduct proper risk assessments for approximately half of reviewed customer files.
- OKCoin (now rebranding to OKX) has implemented compliance improvements and previously paid a €304,000 fine to the MFSA for regulatory failures.
Malta’s anti-money laundering watchdog has imposed a €1 million fine on cryptocurrency exchange OKCoin Europe for failing to properly scrutinize suspicious transactions. According to the Financial Intelligence Analysis Unit (FIAU), the company neglected to adequately monitor €18 million worth of transactions found in 80% of customer files examined during a 2023 inspection.
The FIAU investigation revealed OKCoin, which operates as a licensed virtual asset provider facilitating cryptocurrency trading, did not properly identify money-laundering risks from its products. Additionally, the company failed to conduct risk assessments for approximately half of the customer relationships reviewed during the compliance examination.
Pattern of Oversight Failures
Among the violations highlighted by investigators were unexplained deposit spikes and sudden surges in client activity following periods of inactivity. In one notable case, a client deposited $1.8 million in cryptocurrencies over just four months in 2021, compared to only $50,000 in the previous two years. This dramatic increase went largely unscrutinized until the account was frozen more than a year later.
The FIAU also discovered instances where OKCoin had not updated expired identity verification documents, with some IDs having been expired for up to two years. This indicated the company wasn’t obtaining current, valid documentation from clients as required by regulations.
Despite these findings, the FIAU acknowledged the “significant improvement” OKCoin has implemented over the past 18 months to address these compliance issues.
Company Response and Previous Penalties
A spokesperson for OKCoin, which is transitioning to the OKX brand, told Times of Malta that the FIAU review identified historical gaps in their compliance framework. The company claims to have proactively enhanced its internal processes and anti-money laundering controls over the past two years.
“Over the past two years, we have implemented a comprehensive compliance programme, including technology upgrades, enhanced monitoring, and robust remediation efforts,” the spokesperson stated.
This isn’t OKCoin’s first regulatory challenge in Malta. Last year, the Malta Financial Services Authority (MFSA) reached a €304,000 settlement with the company over separate regulatory failures. That agreement also included implementing additional measures, such as appointing an independent third-party service provider to review the company’s governance arrangements.
In November, a constitutional court overturned a ruling that had previously limited the FIAU’s authority to issue fines like the one imposed on OKCoin.
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