Star Xu, founder and CEO of the bitcoin exchange OKX, has apologized to users for unjustified account suspensions. The entrepreneur attributed these issues to “false positives” in the exchange’s compliance control system.
According to the head of the exchange, these processes still face challenges such as “a high rate of erroneous judgments and suboptimal information gathering.” He assured that the platform’s team is doing everything possible to improve these processes.
“One of the biggest challenges for global compliance is ‘false positives,’ where the system mistakenly identifies regular users as risky. Even with the most advanced databases and technologies in the industry, it is still difficult to determine with 100% accuracy whether an account meets the requirements,” Xu noted.
He reported that OKX’s global compliance team and risk control group comprise over 600 people. The primary task of these specialists is to ensure that the platform is not used for any illegal activities, including terrorism financing, human trafficking, drug trafficking, money laundering, fraud, trading abuses, and so on.
At the client level, this control involves processes such as identity verification (KYC), transaction monitoring, sanctions list checks, and market manipulation detection. In some cases, a small number of accounts are deemed high-risk, and their owners may be asked for additional information, Xu noted.
“Regulators tend to push platforms towards more cautious risk control. That’s why some users, despite complying with requirements and normal behavior, may still receive additional requests from the team, creating the impression that they are being asked to prove: ‘your father is your father,'” acknowledged the CEO of OKX.
In April, the Maltese regulator fined the crypto exchange €1.1 million for violations of anti-money laundering rules in 2023.
In February, OKX admitted to operating an unlicensed money transmission business in the US without complying with KYC/AML requirements, agreeing to pay over $504 million in fines and restitution.