Key takeaways:
- FIU officials in South Korea are reportedly investigating OKX in response to allegations that the company operated as an unauthorized crypto exchange.
- The exchange allegedly promoted its services on Telegram by leveraging South Korean influencers.
Financial Intelligence Unit (FIU) officials in South Korea are reportedly investigating OKX in response to allegations that the company operated as an unauthorized crypto exchange.
The FIU launched an investigation against OKX after obtaining a report regarding the exchange’s operations from the Digital Asset Exchange Association (DAXA), according to a report released on February 7 by News1, a South Korean news channel.
South Korean cryptocurrency users were asked to submit requests in December 2023 to DAXA and the FIU for any information about unlicensed cryptocurrency exchanges operating nationwide.
Although the company lacks a Korean-language website, OKX, formerly known as OKEx, is accused of improperly promoting its “Jumpstart” token sales platform to investors located in South Korea.
According to a News1 article, the exchange allegedly promoted its services on Telegram by leveraging South Korean influencers.
Exchanges must be registered in order to provide cryptocurrency services to citizens of South Korea. The nation’s financial regulators may impose fines for non-registration.
On February 7, the South Korean Financial Services Commission (FSC) said that criminals operating in the cryptocurrency field who manage more than $3.8 million in unlawful gains might face life in jail.
On January 23, the price of OKX’s token, OKB, dropped precipitously; in a couple of minutes, it went from $46.80 to $25.10. Before it recovered, the flash crash destroyed $6.5 billion in diluted market capitalization. As of the publishing date, the OKB price was at $48.16.
On the same day, the FSC of South Korea declared tough actions against crimes relating to cryptocurrencies, such as illicit trading and market manipulation. Commencing on July 19, the new legislation will subject crypto criminals involved in unlawful market activity to criminal penalties, which may include life imprisonment. Life in prison is the penalty for offenders in South Korea who earn above $3.8 million through illicit cryptocurrency trading.
