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OKX’s Meticulous Planning Exposed
Confidential protocols put in place to deal with news of regulatory failings by one of the top-five crypto exchanges, OKX, suggest that the company likely has been expecting a settlement with U.S. authorities for some time.
This happened on Monday when OKX announced a $500 million-plus settlement with the U.S. Department of Justice after failing to secure a money transmitter license and allegedly facilitating $5 billion in “suspicious transactions and criminal proceeds.”
SWAT Team Protocol
OKX’s meticulous planning makes for some fascinating reading. The secret crisis management document seen by CoinDesk refers to a messaging “SWAT Team” that can be mobilized to implement various ways the firm’s top executives can communicate a settlement via social media and when speaking to reporters.
Well in advance of Monday’s large fine and forfeiture, OKX had produced specific guidance with regards to settling with the DOJ, as well as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC, or sanctions watchdog), for example.
Brand Awareness
Another priority for OKX is how the firm choreographs its big-ticket sponsorship arrangements with the likes of Manchester City football club, F1 team McLaren, and the Tribeca Film Festival. The firm estimates that around $100 million per annum has been spent on these partnerships over the past three years.
The action plan for brand partners involves the OKX marketing chief giving each partner a phone call “at the last hour before the news breaks.”
Don’t Mention OKB
Another detail that gets attention in the OKX planning document is the exchange’s native cryptocurrency, OKB. An obvious concern in the aftermath of FTX is any suggestion that OKB has been used as collateral or to finance any operations of OKX, as was the case with FTX’s FTT token.
Of course, the OKB exchange token hasn’t been subject to anything like the iniquities of FTX’s exchange token. However, it was involved in a sudden flash crash in January 2024, after which OKX quickly offered to compensate users who had lost out. The token, which has a relatively thin trading volume and liquidity, saw 10 dormant wallets become active and begin trading just before the crash, according to Marina Khaustova, COO of Crystal Intelligence, a blockchain analytics firm.
Not long after the OKB crash, OKX executives Tim Byun, the former CEO of OKcoin and head of global government relations, and Head of Product Wei Lan were let go by OKX. A source familiar with the situation said Byun was “sacrificed” following the OKB crash.
Unsurprisingly, the OKX comms protocol emphasizes that execs should “refrain from mentioning OKB and reference this only if asked.”
Media Management
Another part of the puzzle is how the exchange should deal with media inquiries. Should OKX receive emails or a phone call from a journalist looking for comment about ongoing investigations, the SWAT Team and PR team should go into action to “buy time by offering up leadership schedules”
Meanwhile, the plan is “to contact key friendly publications for a parallel story to seed in a complimentary narrative to the originating story,” the document states.
OKX did not provide a comment by press time.
Conclusion
In conclusion, OKX’s meticulous planning and preparations have led to a $500 million-plus settlement with the U.S. Department of Justice. The company’s willingness to cooperate with regulatory authorities and provide transparency in its operations has been demonstrated through its settlement and subsequent actions.
FAQs
Q: What is the nature of OKX’s settlement with the U.S. Department of Justice?
A: OKX has agreed to a $500 million-plus settlement with the U.S. Department of Justice after failing to secure a money transmitter license and allegedly facilitating $5 billion in “suspicious transactions and criminal proceeds.”
Q: What is the OKB exchange token?
A: OKB is the native cryptocurrency of the OKX exchange. While it has not been subject to the same scrutiny as FTX’s FTT token, it was involved in a sudden flash crash in January 2024 and has a relatively thin trading volume and liquidity.
Q: Why did OKX’s executives leave after the OKB crash?
A: Tim Byun, the former CEO of OKcoin and head of global government relations, and Head of Product Wei Lan were let go by OKX after the OKB crash. A source familiar with the situation said Byun was “sacrificed” following the OKB crash.
Q: What is OKX’s approach to media management?
A: OKX has a SWAT Team and PR team that handles media inquiries. They work together to “buy time by offering up leadership schedules” and contact key friendly publications for a parallel story to seed in a complimentary narrative to the originating story.
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