OKCOIN EUROPE LTD - Conflicts of Interest Disclosure
OKCOIN EUROPE LTD is a private limited liability company incorporated and registered in Malta under company registration number C88193, with its registered office at Piazzetta Business Plaza, Office Number 4, Floor 2, Ghar il-Lembi Street, Sliema, SLM1562 - Malta (the “Company”). The Company operates under the brand “OKX” and is part of the OKX group of centralised crypto exchanges.
As of 27 January 2025, the Company has been authorised as a Crypto-Asset Service Provider (“CASP”) under the Markets in Crypto Assets Act (Chapter 647 of the Laws of Malta), and as of 14 February 2025, the Company has been authorised to passport in the below 27 EU countries (“Permitted Countries”) as a CASP to provide the below listed services (“Permitted Services”) under article 63 of the Markets in Crypto Assets Regulation (EU) 2023/1114 of 31 May 2023 (MICAR). The Company is regulated and supervised by the Malta Financial Services Authority (the “MFSA”).
OKX is required to establish, implement and maintain an effective program, taking into account the nature, scale and range of its crypto-asset services, to appropriately identify, prevent, manage and, disclose conflicts of interest on its website. This is the purpose of this webpage.
The following section sets out the effective organisational and administrative arrangements implemented by OKX to identify, prevent and manage conflicts of interest entailing a material actual, or potential risk of damage to the interests of OKX and / or its clients.
The disclosure of conflict of interest is in compliance with the applicable legal and regulatory framework applicable to OKX :
Regulation (EU) 2023/1114 on Markets in Crypto-Assets, Article 72 : Identification, prevention, management and disclosure of conflicts of interest.
OKX is required to disclose the general nature and sources of conflicts of interest. Any such disclosures shall include sufficient detail to enable clients to make an informed decision, in the context of which a conflict of interest may arise.
A conflict of interest is defined as a situation in which the personal, financial, or other interests of OKX, its employees, or its associated parties may potentially interfere with the ability to act impartially and in the best interests of clients and stakeholders.
A conflict of interest exists when the interests of OKX and its obligation to protect the best interests of the client, conflict with one another. OKX must also gain an advantage while, at the same time, the client suffers or may suffer a disadvantage.
IDENTIFICATION OF CONFLICTS
Conflicts of interest may, amongst others, arise between OKX and:
its shareholders;
any person directly or indirectly linked to OKX (or its shareholders or members by control);
members of the Board of Directors;
its employees;
its clients;
two or more clients whose mutual interests conflict.
For the purposes of this disclosure, the following definitions applies to:
“connected person” : means any of the persons referred to in the paragraph above of this Section;
“remuneration” : means any form of payment or other financial or non-financial benefits provided directly, or indirectly by OKX, in the provision of crypto-asset services to its clients;
“group” : means a group as defined in Article 2(11) of Directive 2013/34/EU.
OKX maintains a "Conflicts of Interest Register" which records conflicts of interests arising from time to time, and the manner in which the risks relating to those conflicts of interests are mitigated.
Conflicts of Interest potentially detrimental to clients
For the purposes of identifying the conflicts of interest that may arise in the course of providing crypto-asset services, and whose existence may damage the interests of one or more clients, OKX considers, as a minimum, whether OKX or any connected person in any one of the following scenarios:
it is likely to make financial gain, avoid financial loss, or receive another kind of benefit, at the expense of a client;
it has an interest in the outcome of a crypto-asset service provided to a client, or of a transaction carried out on behalf of a client, which is distinct from the client’s interest in that outcome;
it has a financial or other incentive to favour the interest of one or more clients over the interests of another client;
it carries out the same business as a client;
it receives or will receive from a person, other than a client, an inducement in relation to a service provided to the client, in the form of monetary or non-monetary benefits or services.
Conflicts of Interest due to other entities within the OKX group
OKX takes into account any circumstances which may give rise to a conflict of interest, due to the structure and business activities of other entities within the group. In particular, OKX prevents any abuse resulting from concentrated control, management of related-party transactions (including affiliated companies), and transparency of related-party transactions.
Conflicts of Interest potentially detrimental to OKX
For the purposes of identifying circumstances that may create conflicts of interest related to the performance of a connected person’s duties and responsibilities, OKX considers, as a minimum, the situations and / or relationships whereby a connected person:
has an economic interest in a person, body or entity with interests conflicting with those of OKX;
has, or has had, within at least the last two (2) years a personal, professional and/or political relationship with a person, body or entity with interests conflicting with those of OKX;
carries out conflicting tasks or activities, is entrusted with conflicting responsibilities, or is hierarchically supervised by a person in charge of conflicting functions or tasks.
For the purposes of the above, OKX considers the following as amounting to an ‘economic interest’:
holds shares, tokens (including governance tokens), other ownership rights or membership in that person, body or entity;
holds debt instruments of, or has other debt arrangements with, that person, body or entity;
has any form of contractual arrangements, such as management contracts, service contracts, delegation or outsourcing contract or intellectual property licences, with that person, body or entity.
For the purposes of identifying the persons, bodies or entities with conflicting interests to OKX, OKX considers whether such person, body or entity is in any of the following scenarios:
it is likely to make a financial gain, or avoid a financial loss, at the expense of OKX;
it has an interest in the outcome of a crypto-asset service, activity or decision by OKX, which is distinct from OKX’s interest in that outcome;
it conducts the same business as OKX or is a client, consultant, adviser, delegatee, outsourcee, service provider or other supplier (including sub-contractors) of OKX, and it can be reasonably deemed, from objective circumstances, that there may be a conflict of interests with OKX.
Conflicts of interest in connection with OKX products
This potential conflict of interest situation may arise between the client and OKX in relation to OKX issuing, promoting, or trading in crypto assets for which it also provides services, such as custody, exchange and execution of orders. This creates a situation where OKX may have a financial interest, that conflicts with its duty to act in the best interests of the client. In such cases, there is a risk that OKX may prioritize its own products or those of affiliated entities over others, potentially leading to biased promotion of its own products. To monitor potential conflicts of interest on products, OKX has implemented different programs to meet the regulatory obligation under its MiCA license in order to identify, assess, evaluate, prevent and disclose conflicts of interest. Where a possible conflict of interest has been identified, a staff member shall initially refer such conflict of interest to its immediate supervisor to assist in the assessment of a material risk of damage.
Conflicts of interest in connection with remuneration
This potential conflict of interest situation arises between the client and OKX in relation to the remuneration of employees. OKX group has implemented a Remuneration Policy applicable to all the identified staff. The Remuneration Policy aims to ensure that the Company’s remuneration procedures, practices and arrangements do not to create a conflict of interest or incentive that may lead persons to favour their own interests, or the Company’s interests, to the potential detriment of any client, or that may lead persons to favour their own interests to the detriment of the Company.
Conflicts of interest in relation with financial incentives for token listing
This potential conflict of interest arises between the client and OKX, in relation to all forms of financial incentives that OKX may receive from third parties. OKX shall not receive payments, cost sharings, rebates, or other financial benefits from third-party service providers, partners, or affiliates in exchange for listing specific crypto-assets or related services. This may create a conflict where OKX is incentivized to promote products or services based on financial gain, rather than the best interests of the client. OKX takes all reasonable actions to identify, avoid and mitigate all conflicts of interest related to a crypto-asset under token listing review. OKX has implemented a comprehensive program where global standards and procedures manage conflict of interest specific to the token listing process. When a conflict is identified and it is demonstrated and sufficiently material enough that it cannont be managed any other way, then the individual is asked to recuse themselves from the review process. Failure to comply with this practice may result in disciplinary action up to and including termination of employment. OKX takes all reasonable measures to identify, avoid and mitigate risk from conflicted staff and affiliated entities from trading the crypto-asset while it is under review, and trading the crypto-asset for a commercially reasonable time period, after it is made available on the OKX Europe trading platform as well. This is a potential conflict of interest managed by the insider trading program.
Conflicts of interest in connection with trading rules
This arises between the client and OKX as OKX has the authority to allow or suspend certain crypto assets. Given its financial interest in these assets, there is a risk that trading suspensions may be influenced by OKX’s own exposure, rather than solely by market conditions or the best interests of clients. This could allow OKX to minimize risks while clients are unable to trade, potentially leading to less favourable outcomes for them once trading resumes. A further conflict may arise if OKX suspends trading for a longer period of time in order to avoid a financial loss, which could result in a financial loss for the client. To monitor potential conflicts of interest, OKX has implemented a Trading Rules procedure that includes pre-trade/post-trade controls. Moreover, OKX has adopted an effective market surveillance system to identify, monitor, detect and prevent any market manipulative or abusive activities on the Trading Platform.
Decisions regarding order execution and execution venues
OKX will use its commercial judgement and experience in light of available market information and market conditions at the relevant time, in order to achieve the best balance across the following Execution Factors as specified into OKX's Best Execution Policy :
total Consideration [Price and Cost] – This refers to the total consideration or net cost of the transaction to the Client. When transmitting a transaction in respect of a Client, OKX takes into account, where relevant, the fees and commissions charged by OKX to the Client.
speed – OKX considers: (i) the significance of completing the transaction quickly; and (ii) whether speed is of equivalent importance to, or more important than, achieving the best possible price.
likelihood of Execution and Settlement – OKX will consider whether the use of a particular Execution Venue involves a risk(s) that the transaction will not be completed due to lack of liquidity or other factors that may affect the settlement of the transaction.
size – OKX shall consider the size of the transaction. Large orders may have to be dealt with differently to smaller orders, particularly when large orders could have a potential impact on the market and market price for the crypto-asset concerned.
any other consideration relevant to Transmission of Orders, which may include but are not limited to low liquidity and/or high volatility.
In order to achieve operational efficiency, and subject to the execution factors outlined above being satisfied, OKX transmit its clients’ orders to its own central limit order book and act as an execution venue. The relative importance of the execution factors will vary on a case by case basis and may be determined by reference to:
the characteristics of the Client;
the characteristics of the Client order;
the characteristics of the crypto-assets that are the subject of that order.
Given the nature of the market for crypto assets, OKX considers “Speed” and the “Total Consideration” as the main Execution Factors that it should fulfil in order to ensure best execution.
OKX will achieve the best available terms for a client when it optimises “Speed” and the “Total Consideration” paid or received by a Client. Where OKX transmits an order on behalf of a Client, the Total Consideration is the price of the crypto-asset and the costs related to the completion of the transaction, including all expenses incurred by the Client which are directly related to the transmission of the order.
In light of the fact that OKX also operates a crypto currency exchange, OKX may transmit orders (generally arising from the provision of portfolio management services) to its own central limit order book and act as an Execution Venue. OKX may use other entities as execution venues. The execution venues selected by OKX, shall have execution arrangements that enable OKX to comply with its obligations under the rules, when it transmits orders to those execution venues for execution.