European watchdogs probe OKX amid allegations of laundering stolen crypto
OKX and allegations of laundering stolen crypto
European financial regulators are investigating cryptocurrency exchange OKX over allegations that its Web3 platform was used to launder funds stolen in a $1.46 billion cyberattack on Bybit, one of the largest crypto exchanges.
According to sources cited by Bloomberg, the probe was discussed at a recent meeting of the European Securities and Markets Authority’s (ESMA) Digital Finance Standing Committee, according to Crypto News.
The inquiry is being led by national watchdogs from the European Union’s 27 member states, focusing on whether OKX’s decentralized finance (DeFi) platform falls under the EU’s new Markets in Crypto-Assets (MiCA) regulations, which took effect in late 2024.
Austrian and Croatian regulators argue that despite OKX branding its Web3 service as decentralized, its integration with the broader OKX ecosystem may warrant regulatory oversight under MiCA.
Risk of losing MiCA authorization
Authorities allege that North Korean-backed hackers laundered approximately $100 million of the stolen Bybit funds through OKX’s Web3 service, raising concerns about the platform’s security measures and compliance with anti-money laundering protocols.
Under MiCA’s Article 64, regulators can revoke an exchange’s license if it fails to implement effective safeguards against illicit activity.
OKX has denied any involvement in the laundering of stolen assets, with a spokesperson calling the claims “inaccurate and preposterous.” However, the ongoing investigation could lead to stricter regulatory actions, including the possible revocation of OKX’s MiCA authorization in Europe.
The case highlights growing scrutiny over crypto exchanges operating in the EU as regulators seek to enforce MiCA’s framework in an industry long criticized for its vulnerability to financial crime.
Meanwhile, European crypto exchanges will remove non-compliant stablecoins ahead of the EU's MiCA deadline. Because of this, Coinbase delisted Tether (USDT) and five others on December 13 2024, but will keep supporting USD Coin and EURC.
