OKX Under Fire Over Fake IDs in KYC Verification

Reports say that OKX is being investigated because they are suspected of taking fake IDs during the Know-Your-Customer (KYC) process.

Journalists from 404 Media have shed light on possible flaws, indicating that OKX might be unable to spot false information when users sign up.

Fake IDs Slip Through OKX, Prompting Industry-Wide Scrutiny

According to the investigation, a website takes $15 to create fake IDs that look real and says they use “neural networks” to do the job. Surprisingly, these fake IDs were said to have passed OKX’s Know Your Customer (KYC) checks, which makes people wonder how well the exchange’s identity-checking processes work.

The investigation report says that journalists tried OKX’s verification process by using a web service to make a fake British passport. The data showed that OKX’s KYC/AML (Anti-Money Laundering) systems were not as strong as they should have been. This suggests that the exchange may not have done enough to protect users’ identities.

In response to claims that OKX accepted fake IDs, Jumio, OKX’s verification partner known for having strict verification procedures, did not say anything about OKX’s specific procedures. While Jumio discussed how it recognizes fake profiles, OKX didn’t say anything about its verification methods.

In an unexpected admission, a customer service agent from OKX told Protos that accurate KYC/AML checks might not be done when users create accounts or deposit cryptocurrency. The representative clarified that OKX checks for KYC/AML when someone is “trying to take money off the OKX platform.”

As of this writing, OKX has not made any public statements about the claims or the stated flaws in its KYC verification process.

When stolen funds go to a crypto exchange people like to assume that there is a real person with a real identity tied to an account

To disprove this I was able to create an account on @gate_io and KYC as “Kim Jong-Un” with the email “notlazarus” and within minutes I was verified pic.twitter.com/oCZLK4hBh9

— ZachXBT (@zachxbt) May 9, 2023

Concerns like these have been raised in the cryptocurrency business before this event. In May 2023, blockchain analyst ZachXBT revealed that Gate.io had confirmed an account under the name of North Korean politician “Kim Jong-Un” using the email address “notlazarus.” This finding makes us think more deeply about how well identity verification protocols work across all cryptocurrency exchanges and the need for reviewing these protocols across the whole industry.

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