OKX founder and CEO Star Xu has issued a public apology after users reported having their accounts frozen despite completing extensive identity verification steps. The incident has renewed scrutiny over the balance between regulatory compliance and customer experience at one of the world’s largest crypto exchanges.
In a statement shared Friday, Xu acknowledged that the platform’s compliance procedures had produced “false positives,” resulting in fully verified users being locked out of their funds.
“We sincerely apologize for any inconvenience caused,” Xu said.
“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.”
The exchange’s systems flagged certain accounts as potentially high-risk, triggering requests for additional documentation. However, several customers said the process was opaque and repetitive, leaving them unable to access assets for weeks.
Compliance Efforts Struggle to Balance Precision and Caution
Xu elaborated on the challenges inherent in maintaining global compliance across a platform that serves millions of users.
“One of the biggest challenges in global compliance is ‘false positives’—where the system mistakenly flags normal users as risky,” he explained. Even with advanced technology and a 600-member compliance team, he said, errors are inevitable.
He noted that OKX, like many other exchanges, has adopted an “aggressive identification” strategy because regulators often prefer firms to err on the side of caution when assessing risk.
“This is why some users, despite being fully compliant and behaving normally, may still receive additional information requests,” Xu said, describing the process as frustrating and sometimes feeling like
“being asked to prove your dad is your dad.”
While these measures are intended to protect the platform from fraud and money laundering, the CEO admitted that they can also create unintended barriers for legitimate customers.
“It’s undeniable that false positives cannot be entirely eliminated in any compliance system,” he added.
User’s Story Highlights Frustration With Verification Demands
The apology followed a widely shared complaint from an OKX user who said their account had been frozen since June 21, despite multiple attempts to satisfy compliance checks.
In posts on X, the user claimed that after redoing Know Your Customer (KYC) verification, they were required to submit a decade of employment history, detailed records from the last five years, and proof-of-funds documentation.
Adding to the frustration, the user said the submitted materials were repeatedly rejected because their information allegedly did not align with the platform’s “selected answers.”
Xu responded by sharing the customer’s account publicly with his more than 130,000 followers, saying that the experience demonstrated the shortcomings of even sophisticated compliance frameworks.
The incident underscores a growing tension across the crypto industry as exchanges try to satisfy increasingly strict regulations without alienating users.
As platforms scale globally, they are under pressure to show regulators they can manage risk effectively, but many customers argue that the burden of proof often falls too heavily on ordinary account holders.
Moving forward, Xu pledged to improve the user experience without compromising security, though he cautioned that no system would ever be perfect.
Quick Facts
- OKX CEO Star Xu apologized for wrongful account freezes caused by “false positives” in compliance systems.
- A user reported being locked out for weeks despite repeated verification, sparking public debate.
- Xu admitted that fully eliminating such errors is unlikely but promised improvements to the process.
