False positives are one of the most significant problems the CEO of OKX says the crypto exchange has to deal with when it comes to ensuring world compliance.
Star Xu, the founder and CEO of OKX, has apologized to users after reports of unfair account freezes on the cryptocurrency exchange. In one case, a user was locked out of their funds even after going through many proof steps.
“We’re truly sorry for any trouble this may have caused.” Xu wrote in a Friday post, “We are aware that problems like high false-positive rates and poor user experience in the information collection process are still present during compliance and risk control operations.”
The compliance system sometimes gets it wrong.
Xu said:
“One of the biggest challenges in global compliance is ‘false positives’—where the system mistakenly flags normal users as risky.”
He said that even the most powerful technologies can’t always ensure users follow the rules.
“Many service providers use an ‘aggressive identification’ strategy, and regulatory authorities often tell platforms to err on the side of caution when controlling risk,” he said.
This is why users who are following the rules and don’t seem to be a threat may still get compliance inquiries:
“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 said that OKX’s global compliance team has more than 600 people, but he also said it would unlikely eliminate all false positives.
“There’s no way to eliminate ‘false positives’ completely in any compliance system,” Xu said.
Xu told his fans about a user’s complaint.
The apology came after a user on X said on Friday that their account had been frozen since June 21 and turned down several times during a strict name verification process.
About 130,800 people who followed Xu on X saw the user’s public protest.
The user said they had to go through the Know Your Customer (KYC) process again and were also asked to give information about their current and past employers and work background from the last ten years.
The user said that their proof-of-funds papers were turned down because the information on them didn’t match the “selected answers” on the platform.
