David Edwards
Following accusations that some customers were mistakenly locked out of their accounts because of false compliance flags, which led to criticism of the exchange’s risk control procedures, OKX founder and CEO Star Xu issued a public apology.
Xu admitted the operational issues in a post published on Friday, pointing to high false positive rates and a poor verification procedure that irritated users. “We sincerely apologize for any inconvenience caused,” he wrote. “We acknowledge that issues such as high false-positive rates and suboptimal user experience in the information collection process still exist during compliance and risk control operations.”
Global Compliance Issues: Overreach and False Positives
One of the most enduring problems with global cryptocurrency compliance is false positives, or situations in which genuine individuals are inadvertently marked as suspicious. Xu clarified that because risk assessment in a decentralized ecosystem is inherently complex, even the most advanced systems have a tendency to misclassify users.
“Many service providers adopt a ‘aggressive identification’ strategy,” he noted, emphasizing that regulatory bodies often encourage exchanges to lean toward caution in order to mitigate potential threats. This cautious approach, therefore, has the potential to trap individuals who pose no real risk to compliance.
“This is why some users, despite being fully compliant and behaving normally, may still receive additional information requests from the compliance team—sometimes feeling like they’re being asked to ‘prove your dad is your dad,’” Xu added.
Online Escalation Reports from OKX Users
A mounting criticism on social media prompted the apologies. After going through a lengthy sequence of Know Your Customer (KYC) procedures, one user claimed in a detailed account post on X (previously Twitter) that their OKX account had been frozen since June 21.
The user claims that they had to submit employer information, undergo a review of their employment history spanning ten years, and have five years’ worth of job records verified. The user claimed that their information was rejected because it did not match the platform’s pre-selected verification alternatives, even though they had sent proof-of-funds documentation.
By publishing the user’s experience to his 130,800 followers on X, Xu immediately addressed the complaint and reaffirmed OKX’s goal to increase responsiveness and openness.
