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OKX Pays Penalty in Malta Over “Regulatory Failings”

OKX Pays Penalty in Malta Over “Regulatory Failings”

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Cryptocurrency exchange OKX quietly settled with Malta’s Financial Services Authority (MFSA) after the exchange paid a “goodwill” penalty of $322,000 (304,000 euro).

 Malta’s Financial Service Authority agreed to settle pending matters with crypto exchange OKX after the exchange demonstrated an act of goodwill by paying a $322,000 penalty. The settlement relates to issues between the MFSA and OKX’s OKCoin Europe subsidiary, which has been operating in Malta since 2018. 

A Gesture of Goodwill

Last month, the second largest cryptocurrency exchange, OKX, quietly settled with the Malta Financial Services Authority (MFSA) over regulatory failings related to its OKCoin Europe subsidiary. In a gesture of goodwill, OKX paid $322,000 in penalties and agreed to several measures with the MFSA. 

According to the settlement published on February 1, the MFSA’s investigation into the company found “failings in respect of Article 41 of the Virtual Financial Assets Act.” In terms of Article 41, a regulated financial services or digital asset firm must adhere to Maltese directives or risk being fined or kicked out of the country.  

In its announcement, the MFSA said:

“On 22 January 2024 the MFSA agreed to settle pending matters with the Company after demonstration of goodwill by the Company.”

The regulator further considered that OKX cooperated with all proceedings and agreed to a number of measures, including appointing an independent third-party service to review the exchange’s processes for compliance with local regulations. The MFSA said:

“By means of a settlement agreement entered into between the Company and the MFSA, the latter imposed an administrative penalty amounting to three hundred and four thousand Euro (€304,000).

Additionally, the Company and the MFSA have also agreed on a number of measures, including the appointment of an independent third-party service provider, to inter alia, review the adequacy of the Company’s governance arrangements.”

OKX Faces Regulatory Challenges

OKX has recently faced several hurdles regarding its regulatory compliance. Last week, the exchange announced it would terminate its services in India and advised customers to close out their positions by April 30. The decision was spurred after India’s Financial Intelligence Unit (FIU) identified nine crypto exchanges operating illegally in the country, including OKX, Binance and Kraken.

In December, the FIU asked the Ministry of Electronics and Information Technology to block these exchanges in India. Following the FIU’s findings and request, Apple removed the apps of the exchanges from its App Store, and Google removed them from its Play Store.  

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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