OKX targets Wall Street: a settlement of nearly 500 million dollars to pave the way, can the US use the US to achieve IPO and compliance transformation?
By Nancy, PANews
Original title: OKX targets Wall Street and gets $500 million settlement in exchange for “tickets” to accelerate expansion of the US market and prepare for an IPO?
At a time when the global regulatory environment is gradually becoming clear and the market's enthusiasm for crypto concept stocks is rising, the crypto industry has ushered in a new round of sprinting into the capital market, and competition on the exchange circuit is particularly intense. Recently, the established crypto exchange OKX was also revealed by foreign media that it is actively preparing to go public in the US, drawing market attention. From achieving capital allocation through backdoor Hong Kong stocks in the early years to now planning to move to the US capital market, this is not only a milestone event for OKX itself, but also a microcosm of the formalization process of the entire crypto industry.
$500 million settlement in exchange for a “ticket” to the US market
On June 23, according to The Information crypto reporter Yueqi Yang, OKX is considering an IPO in the US after returning to the US market in April this year.
In fact, as early as March of last year, according to Wu said blockchain reports, OKX had adjusted the compliance department located in the US to the highest priority for all departments. Compliance departments located in the US are the highest priority for all businesses. OKX founder Star also often travels to the US.
Over the past few months, OKX has made frequent moves around compliance, paving the way for entry into the US market.
At the end of February this year, OKX announced its subsidiary Aux Cayes Fintech Co. Ltd. settled an investigation with the US Department of Justice, admitting that a small number of US customers have traded on the company's global platform due to historical inadequate compliance controls. Under the settlement agreement, OKX agreed to pay a $84 million fine and forfeited approximately $421 million in revenue from US customers during this period, most of which came from a small number of institutional clients.
This cost of nearly 500 million US dollars has given OKX a new ticket to the US market. After completing the settlement, OKX quickly restructured its internal powers, particularly the complete replacement of core legal and compliance executives. Including former Chief Legal Officer Mauricio Beugelmans and former head of compliance Vanessa Zhang, who left their posts one after another, it was pointed out that they were related to the $500 million settlement. More importantly, OKX has begun to drastically introduce veterans with a background in US regulation and traditional finance. For example, Linda Lacewell, the former head of the New York State Financial Services Authority, became the chief legal officer and reorganized OKX's legal and compliance department after taking office; Jonathan Brockmeier became the chief compliance officer. He created a compliance system for the American region at Thunes, a Singaporean fintech unicorn, and designed and implemented a regulatory framework covering the US, Canada, Mexico, and the entire Latin American market.
Meanwhile, OKX continues to expand the US market. Since September of last year, OKX US has set up teams in New York, San Francisco, and San Jose, where it is headquartered, with about 500 employees, and has obtained operating licenses in about 47 states and some regions (such as Washington, D.C., and Puerto Rico).
Meanwhile, in May of this year, OKX officially announced that its CEX (centralized crypto exchange) and OKX wallet were officially launched in the US, and a regional headquarters was established in San Jose, California. US customers can now use its platform, and OKX will be rolling out new features throughout the year. In this expansion, existing OKCoin customers will be seamlessly migrated to the OKX platform, new customers will be accepted in stages, and full promotion across the US is planned later this year.
Roshan Robert, a former Barclays Bank and Broker Hidden Road executive, will lead OKX's US expansion. According to The Block previously, Roshan had “played a role” in helping Barclays futures trading department deal with the new regulatory regime. Currently, his priority is to establish OKX's leading position in the spot trading market, and he is also planning to introduce OKX's existing payments and derivatives business to the US. “Our long-term vision is of course to become a benchmark 'super app', and we plan to gradually move towards this goal.”
In the early days, it went public in Hong Kong, and OKX used the US to expand and still face compliance challenges
“Today's US is not a prohibited place for crypto companies. On the contrary, it is a land of huge untapped opportunities when cut in the right way.” Robert once said.
Over the past few years, crypto companies have generally viewed the US as a high-pressure regulatory zone. Repeated policies and unclear regulatory standards have deterred innovative projects. However, with the gradual clarification of US regulatory policies, especially since US President Trump returned to politics, the regulatory attitude of US regulators on digital assets showed a trend of de-risking, and the focus of regulation gradually shifted from “prohibition” to “compliance to promote innovation,” opening a new window for crypto companies.
Coinbase's successful listing on NASDAQ also became a pioneering model for centralized exchanges to enter the US capital market. This year, exchanges such as OKX, Kraken, Bithumb, Bullish, and Gemini have also launched plans to go public in the US, and the competition for capital ownership of crypto companies has entered an accelerated racetrack.
For OKX, this move is more of a restart of the strategic window. In fact, as early as 2019, when China's crypto regulatory policy was tightened, OKC Holdings Corporation, the parent company of OKCoin (OKX's predecessor), bought 3.183 billion shares of the Hong Kong stock listed company Qianjin Holdings through OTC acquisitions, accounting for 60.49% of the total share capital, and a total transaction amount of HK$483 million. As a result, OKX CEO Star (Xu Mingxing) became the actual controller. After completing the merger and acquisition, OKCoin and OKEx began a split operation. The Chinese name of the former brand was changed to “Oke Cloud Chain”, and the latter became today's OKX.
It is worth noting that before going public at the time, in order to reduce risk, the early investor Giant Network (founded by Shi Yuzhu) transferred 14% of its shares at a price of 28.5 million US dollars. One of the successors was Kalyana Global Limited, and its actual controller was Shi Jing, the daughter of Shi Yuzhu. Based on the transaction valuation at the time, the market estimated that OKX was valued at around $200 million.
As can be seen from OKC Holdings' public information, the shareholder lineup behind it is very characteristic of Chinese capital, including Shi Yuzhu's daughter Shi Jing, Ceyuan Venture Capital founder Feng Bo, Venture Factory founder Mai Gang, Meitu founder Cai Wensheng, and Yintai Group Chairman Shen Guojun. Among them, Mai Gang was an early evangelist of Bitcoin in China. He is closely related to Star. He was an angel investor in Douding.com in its early startup project, and they were also one of the earliest supporters of Bubble Mart.
Despite the relatively open US market environment, the compliance challenges faced by OKX's US IPO should not be underestimated. On the one hand, the US SEC still holds the “unregistered securities” position on most platform coins, and this may also become a major regulatory obstacle for OKX to IPO in the US. The market generally anticipates that if OKX advances its IPO plan, it will inevitably need to split and restructure the existing business structure, especially divest the business related to the issuance of the platform coin OKB to avoid potential compliance risks.
More importantly, changes at the legislative level. The “CLARITY Act,” which is seen as a watershed in US crypto regulation, was passed by the House of Representatives this year. The bill sought to provide a clear legal definition and registration path for digital assets, and even redefined how “digital goods” and “securities” are classified. However, negotiations on the bill have now stalled, and the White House has vetoed key provisions in it to limit conflicts of interest in cryptocurrencies. If the CLARITY Act is finally passed, it will provide a predictable and enforceable compliance registration path for crypto trading platforms, including OKX, and significantly enhance their market confidence and valuation space.
It can be said that OKX's choice to enter the US capital market may not only be a game of legitimacy, but also a reshaping of its own valuation and identity. But only if it can cross the compliance threshold and gain market recognition.
