Authorities with South Korea’s Financial Intelligence Unit (FIU) are reportedly investigating OKX following allegations the firm was operating as an unregistered cryptocurrency exchange.

According to a Feb. 7 report from South Korean news outlet News1, the Digital Asset Exchange Association (DAXA) reported OKX’s activities to the FIU, prompting an investigation into the exchange. In December 2023, DAXA and the FIU solicited requests from South Korean crypto users, asking for any information on unlicensed crypto exchanges in the country.

OKX — formerly OKEx — allegedly promoted its ‘Jumpstart’ token sales platform to South Korea-based investors without proper registration, though the firm does not have a Korean-language website. News1 reported that the exchange allegedly used South Korean influencers on Telegramto promote its services. Cointelegraph reached out to OKX for comment but did not receive a response at the time of publication.

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Under South Korean regulations, exchanges are required to register before offering crypto services to residents. Failure to register could result in penalties from the country’s financial regulators. On Feb. 7, South Korea’s Financial Services Commission announced that crypto criminals dealing with more than $3.8 million in illegal profits could face up to life in prison.

On Jan. 23, the price of OKX’s token OKB dropped roughly 48% from $46.80 to $25.10 in minutes. The flash crash wiped out $6.5 billion in diluted market capitalization before recovering. At the time of publication, the OKB price was $48.16.

Magazine: OKX token’s $6.5B flash crash, crypto exec ‘Mr Bang’ on the run: Asia Express