Large cryptocurrency exchange OKX has committed to updating its compliance and risk management systems after more users reported account freezing and other warning signs that are happening often.
The platform acknowledged that its existing systems have incorrectly labelled some authentic users as high-risk resulting in account restrictions and requests of further personal data.
Compliance Measures and User Monitoring
According to OKX, it has compliance measures such as Know Your Customer (KYC) verifications and transaction surveillance; which help to impede law abidance exercises and guarantee conformity to international laws and regulations. The platform screens user activity against sanctions lists and applies proprietary behavior models and third party databases in measuring risk. The employee version of such checks also exists, and OKX insists on a zero-tolerance policy on misconduct, whether it is disinformation, insider trading, or any action that may cause damage to users.
The exchange said that accounts deemed to have breached may have temporary bans, demands of evidence, or be closed permanently. When the accounts are connected to the sanctioned persons or those that involve terrorism suspicions, the platform will lock the asset of the users. OKX stressed that such efforts are required because of operational security needs and legal requirements.
System Errors and False Positives
As it justified the necessity of its risk controls, the exchange also admitted that false positives are still an issue. The exchange acknowledged that a number of the individuals have ended up being falsely flagged as dangerous and hence their businesses interrupted, as well as demands of sensitive documents. It blamed such mistakes in part to conservative regulatory trends that favor strict user vetting. OKX assured its user that non-involvement in illegal activities would not lead to permanent punishment and privacy right will be exercised during the process.
The platform claimed that it labors to streamline the systems to limit inconveniences and enhance the submission procedure to users brought about by risk alerts. It motivated the users by asking to submit demanded records like address verification, work history, and financial sources records, which should be embraced because then issues will take short time to solve.
User Frustrations and Accusations
Some users indicated their dissatisfaction with the process through which the flagged accounts are managed although the platform assures them of being safe. A user testified on having his account with 10,000 USDT frozen upon being questioned around the same information about his personal and work history severally. He claimed that the process was purposely made cumbersome and criticized OKX of mistreating its compliance checks to chase people away.
The reaction of users indicates that OKX has acted unfairly and regulatory compliance is not seen as sufficient reason to continue its actions; greater accuracy and finally achieved transparency in the risk assessment process can be viewed as the main reason behind the increasing anger of the users.