OKX promises fix to risk flagging system that wrongly tags users

Crypto exchange OKX has pledged improvements to its information collection process after its system mistakenly flagged normal users as risky.

In a Saturday X post, the exchange apologized for its mishap, conceding that its compliance and risk systems still grapple with false positives and operational shortcomings.

The exchange, however, claimed it is working to improve its risk control processes promptly.

OKX says it performs checks on its employees as well

In its X post, OKX also detailed the necessity of its compliance and risk control systems and what they mean for users.

It explained that the processes are vital to ensure the platform remains free from illicit use and meets the required compliance laws.

The exchange also asserted that it vets its staff and upholds a zero-tolerance stance on misconduct, including spreading disinformation, engaging in insider activities, or undermining user rights. It added that it has several internal monitoring checks to help spot infractions and take action promptly.

For its clients, the exchange stated that its systems perform identity verification (KYC checks), monitor transactions, screen against sanctions lists, and detect potential market manipulation. It also incorporates third-party databases with proprietary behavioral models to help identify suspicious or risky accounts.

Should an account be verified to have breached legal requirements or user agreements, the exchange responds by issuing notices, requesting additional information, suspending certain features, or closing the account permanently.

However, if a user’s account is tied to sanctions or terrorism, the exchange will freeze their assets.

OKX acknowledges false positives and asks users not to worry

The exchange, however, revealed that its compliance and risk control systems are not 100% accurate, having flagged several normal users as risky. 

The exchange argued that many service providers typically use an aggressive play in identification checks, driven partly by regulatory guidance recommending prudence in risk oversight. As a result, even fully compliant users with normal activity may occasionally receive additional information requests from the compliance team.

The notice also claimed that platforms evaluate customer risk levels on multiple factors. If one’s account is found to be high risk, more investigation into where the funds originate is conducted.

The exchange, nevertheless, acknowledged that false positives are an issue in any compliance system. It further commented, “We are continuously improving the user experience for submitting documents after triggering risk controls. If you are asked to provide information such as the source of funds, proof of address, or past employment details, please don’t worry—just submit the information truthfully.”

It also assured users that as long as they are not involved in any criminal activity, their account and funds will not be affected, and the platform is still obligated to protect their privacy.

One X user, however, accused OKX of maliciously freezing user account funds and excessively collecting user privacy information. He explained that the exchange had asked for more information multiple times and even froze about 10,000 USDT in his account.

He claimed he contacted the platform’s customer service and submitted tickets, which led to more inquiries about his work history and residential addresses. From his experience, he concluded that the exchange only wanted to trouble its consumers, saying it should be a wake-up call to everyone. He claimed the exchange starts by asking for additional info and then moves on to ask for more repeatedly before eventually freezing your account and rejecting your application.

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