OKX Settlement with U.S. Authorities

Confidential protocols were established by OKX, a leading crypto exchange, anticipating a settlement with U.S. authorities. On Monday, the company announced a settlement exceeding $500 million with the U.S. Department of Justice after failing to secure a money transmitter license and allegedly facilitating $5 billion in suspicious transactions.

Crisis Management

The crisis management document reviewed by CoinDesk details a ‘SWAT Team’ for communications regarding the settlement on social media and with reporters. Prior to the announcement, OKX had prepared specific guidance for negotiating with the DOJ and the Office of Foreign Assets Control (OFAC).

The document recommends presenting the broad industry scrutiny and emphasizing OKX’s cooperation with regulators, a sentiment echoed in the press release that praised the DOJ’s collaboration.

Regulatory Focus

Under President Trump, regulatory agencies have shifted to a less aggressive enforcement approach, but OKX has faced financial penalties, similar to Kucoin and Binance. Guidance for executives outlines their social media responses in the event of leaks or settlements.

Regarding OFAC inquiries, they are advised to downplay U.S. customers’ past trading on the platform by stating that they represented a negligible portion of the overall customer base.

Brand Partnerships

OKX has spent approximately $100 million annually over three years on sponsorships with brands including Manchester City and McLaren. The marketing strategy includes last-minute calls to partners before news announcements and communicating preparedness for regulatory scrutiny.

OKB Concerns

The document underscores the importance of avoiding discussion about OKB, the exchange’s native cryptocurrency, following its recent issues, including a flash crash in January 2024. Executives have been let go in relation to this incident, highlighting the sensitivity around OKB’s reputation.

Media Strategy

For media inquiries related to ongoing investigations, the plan emphasizes delaying responses and seeding friendly narratives in the press. The approach includes strategic communication to manage public perception effectively.

OKX did not respond for comment by press time.