South Korea's FIU Investigates OKX for Operating as Unregistered Crypto Exchange
Summary:
South Korea's Financial Intelligence Unit (FIU) is investigating OKX, a company accused of operating as an unregistered cryptocurrency exchange. The investigation, initiated by a notification from the Digital Asset Exchange Association, found that OKX allegedly marketed its 'Jumpstart' token sales to South Korean investors without proper registration. The company risks facing penalties under South Korean regulations, which require exchanges to register before offering such services. The scrutiny follows a significant drop in the value of OKX's OKB token in January, which saw the token's value fall by almost 48%.
South Korea's Financial Intelligence Unit (FIU) has reportedly embarked on an investigation of OKX due to claims that the company was functioning as an unregistered cryptocurrency exchange, as mentioned in a Feb. 7 News1 report. It was the Digital Asset Exchange Association (DAXA) that alerted the FIU about OKX's operations, instigating the scrutiny. In December 2023, DAXA and FIU appealed to the Korean crypto community for any information about unlicensed crypto exchanges in the nation. Accusations suggest that OKX — formerly OKEx — was endorsing its 'Jumpstart' token sales to investors in South Korea without the necessary registration, despite not having a Korean language website. As per News1, the exchange allegedly hired South Korean influencers on Telegram to advocate its offering. OKX failed to respond to Cointelegraph's request for comment on the matter.
South Korean law mandates that exchanges must register prior to providing cryptocurrency services to its citizens. Any lapse in registration could attract penalties from the country's financial regulating bodies. The country's Financial Services Commission declared on Feb. 7 that cryptocurrency criminals profiting in excess of $3.8 million illegally could potentially face a lifetime jail sentence.
On Jan. 23, the value of OKX's token OKB plummeted nearly 48%, from $46.80 to $25.10 within minutes. This rapid decline obliterated $6.5 billion in diluted market value before regaining ground. At the news report's issuance, the OKB was valued at $48.16.
Published At
2/7/2024 8:50:05 PM
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