On February 24, 2025, OKX, one of the largest crypto exchanges in the world, agreed to pay penalties totaling more than $500M for violating AML laws. Some may view the OKX sanctions as a final remnant of Biden-era policies before a more crypto-friendly Trump administration takes full effect. However, the OKX sanctions are not part of Chokepoint 2.0—they are still administratively and politically a product of the Trump administration. While overall enforcement actions may decrease during Trump’s administration, they will still happen for KYC, AML, and CFT violations, and they are shaping up to be severe.
This article will examine the recent headline-grabbing OKX sanctions in depth, breaking down the settlement terms, the regulatory violations, and the broader implications for crypto businesses under Trump-era enforcement. More importantly, we will detail how businesses can navigate the shifting regulatory landscape to avoid becoming the next target of enforcement actions.
Most headlines report that OKX must pay a $500 million fine, but the actual breakdown is more nuanced. The company will forfeit $420.3 million as part of a criminal settlement and pay a criminal fine of approximately $84.4 million. Notably, this fine reflects a 25% reduction from the minimum recommended amount due to OKX’s cooperation with the investigation and its timely implementation of remedial measures.
The penalty was imposed on OKX, a Seychelles-based entity, for operating in the U.S. market despite officially stating it did not do business there. OKX was aware that U.S. law required it to register as a money services business with FinCEN, yet it still facilitated at least “five billion dollars of suspicious transactions and illicit proceeds,” according to an auditor. The company’s disregard for U.S. regulations was particularly blatant—in one instance, an OKX representative advised a U.S. customer to bypass restrictions by selecting a “random country” for their nationality.
While the financial penalties alone may be crippling, OKX is also facing heightened government scrutiny.
In early 2024, OKX hired an external compliance consultant to strengthen its policies and controls. As part of its plea agreement, OKX must retain this consultant at its own expense through February 2027 and continue cooperating with the United States Attorney’s Office.
The consultant is expected to continue monitoring and securing loopholes that enabled OKX’s regulatory violations, such as:
Beyond financial and legal consequences, OKX has suffered severe reputational damage. It did not just facilitate U.S. transactions but also processed illicit funds—potentially linked to ransomware groups, fraudsters, hackers, and even terrorist organizations. Binance, for instance, was previously cited for enabling Hamas-linked transactions. Such associations undermine crypto’s legitimacy and security, and some consumers may boycott OKX to avoid supporting a platform that knowingly enabled likely criminal activity.
It would be easy to view the OKX enforcement action as a one-off case, a final remnant of the Biden-era’s regulation-by-enforcement approach—one where the SEC aggressively pursued crypto firms for selling unregistered securities under the Howey Test.
However, the re-election of President Trump signals a clear shift in U.S. crypto policy. Under the guidance of AI and Crypto Czar David Sacks, Trump has pledged to prioritize regulatory clarity, particularly for businesses and stablecoin issuers. He has already expressed intent to sign a stablecoin bill as early as August and has committed to ensuring legitimate crypto firms have access to banking services. So far, the administration’s only hardline stance is against Central Bank Digital Currencies (CBDCs), as outlined in Executive Order 14067, Strengthening American Leadership in Digital Financial Technology.
Given this policy shift, one might assume that OKX is merely an unfortunate casualty of Biden-era enforcement. There is some truth to this—under Trump’s administration, OKX might have been treated more leniently regarding its solicitation of U.S. customers, provided it pursued proper licensing as a money services business (MSB) or complied with forthcoming regulations.
However, OKX’s violations went far beyond mere market access. The most egregious offense was its facilitation of illicit transactions, an issue that transcends political administrations. No matter how pro-crypto Trump’s policies may be, the US will not tolerate businesses that fail to adhere to AML (Anti-Money Laundering), CFT (Countering the Financing of Terrorism), and KYC (Know Your Customer) compliance.
Under any political administration, crypto businesses cannot onboard users without verifying their identities, ignore sanctions violations and illicit financial activity, and allow their platforms to become conduits for terrorist financing. This last requirement is a political flashpoint given America’s long history of counterterrorism efforts, beginning most visibly after the terrorist attacks of 9/11. In short, the U.S. government will not hesitate to act against crypto businesses that facilitate illicit finance—regardless of whether the administration is pro-crypto or not.
In fact, under Trump, compliance may matter more than ever. A friendly regulatory environment creates greater opportunities for fully compliant firms, while non-compliant businesses risk being left behind. Those that fail to adapt will not only face regulatory action, but also lose market share, brand equity, and revenue to competitors that fully align with U.S. policies.
Despite the Trump administration’s pro-crypto stance, its policies remain fluid and subject to rapid changes. For example, Trump initially announced plans for a U.S. crypto reserve consisting of Bitcoin, Ethereum, Ripple, Solana, and Cardano. However, during the crypto roundtable’s opening remarks, the focus shifted to a reserve primarily composed of seized Bitcoin, with other agencies auditing their holdings to determine whether assets could be transferred to the Treasury.
While such changes primarily impact institutional and retail investors, other sudden policy shifts could have direct implications for crypto businesses.
One key challenge is the lack of coordination between regulators, government agencies, and private enterprises, which often only communicate in response to specific investigations. These groups can facilitate information sharing on emerging threats, attack vectors, and regulatory updates, helping crypto businesses adapt their KYC, CFT, and AML compliance programs in real time.
To ensure compliance, crypto businesses need a blockchain analytics tool that can:
However, compliance cannot be purely preventive—hacks and breaches are an inevitable reality in crypto. When incidents occur, businesses cannot afford to be passive, as stolen funds may belong to customers or be critical to operational stability. The most effective response is an on-chain analytics solution that helps crypto businesses and law enforcement track fund movements despite obfuscation tactics like chain-hopping, layering, or peel chains and can support multiple blockchains.
The OKX enforcement action is not an isolated event—it serves as a clear warning that KYC, AML, and CFT violations will continue to face strict enforcement under any administration. While the regulatory landscape is becoming more pro-crypto, businesses that fail to implement strong compliance programs will remain at risk of severe penalties, reputational damage, and potential exclusion from the U.S. market.
To stay ahead, crypto firms must adopt robust compliance measures, including tools like Compass, which screens customers and transactions, and Tracker, which follows stolen funds on-chain to assist in bringing criminals to justice. Contact Merkle Science today for a free demo.
