In the fast-paced crypto world, OKX seems to be keeping its momentum.
They recently announced a unique partnership with Standard Chartered to introduce an innovation called “collateral mirroring.” Simply put, this program allows institutions to use digital assets, such as crypto or even tokenized money market funds (MMFs), as collateral for trading. What makes it interesting is that these assets remain safely stored with Standard Chartered as a custodian, while OKX only “displays a mirror image” of the assets in the institution’s trading account.
A Safe Solution Amid Trust Issues
Furthermore, why is this collaboration so interesting? Recently, OKX has been in regulatory trouble in several countries. CNF reported earlier this month that OKX was fined around $1.2 million by the FIAU Malta for violating anti-money laundering rules during a routine inspection in 2023. It didn’t stop there, they also had to pay almost $505 million after pleading guilty to violating US anti-money laundering laws. OKX’s parent company, Aux Cayes FinTech Co., even admitted to running an unlicensed money transfer service. However, this latest collaboration seems to be OKX’s attempt to improve its image in the eyes of large institutions. With Standard Chartered widely known as a trusted global bank, OKX seems to want to say, “Hey, we’re serious about customer asset security!”
OKX’s Big Steps in European Regulation
On the other hand, OKX’s journey in Europe has actually been quite smooth lately. Last February, they managed to obtain a MiCA license. The license means that OKX can now operate legally in 28 European countries with clear regulations. This certainly gives the green light to institutional clients in Europe who are starting to wonder, “Is OKX safe?” But it seems that market confidence in OKX has not fully recovered. Especially after the incident in mid-March, when OKX had frozen certain services that were suspected of being used to launder some of the funds from a massive hack worth $1.5 billion against Bybit. The decision itself came after strict supervision from European regulators.
Big Wins Despite Bumps in the Road
However, when it comes to business performance, OKX actually recorded quite encouraging results in 2024. In its year-end report last December, OKX stated that the number of users of their crypto wallet (OKX Wallet) had jumped by almost 1000%. Not only that, the daily trading volume on their decentralized exchange (DEX) platform also jumped 20-fold. In fact, CEO Star Xu called the year a “major turning point” for OKX and the crypto industry in general. Hmm, high optimism, huh? This figure is actually quite surprising if we remember some of the cases that have befallen them. But that’s the crypto space, sometimes the market cares more about ease of service than the dark history in the past.
Standard Chartered: The Key to Institutional Trust?
Back to the collaboration at the beginning, the presence of Standard Chartered is an important key. As a global bank with “systemically important” (G-SIB) status, this bank provides an independent custodian who is directly regulated at the Dubai International Financial Center (DIFC). Franklin Templeton’s role as a provider of tokenized money market funds underscores the seriousness of this program. Plus, major institutions like Brevan Howard Digital are already lining up to be early participants in the program.