The US Federal Deposit Insurance Corporation (FDIC) has ordered OKCoin to remove misleading statements indicating that its customers’ accounts are insured through the government agency. The FDIC issued the order Thursday in a letter addressed to the exchange’s CEO, Hong Fang.
The FDIC has directed that OKCoin, a San Francisco-based exchange affiliated with OKX, immediately remove any infringing claims from its website. Failing, the banking regulator warned, it could face further enforcement action.
“OKCoin is not insured by the FDIC, and non-filed products are not insured by the FDIC,” the agency said in the cease and desist order. “By not distinguishing between USD deposits and crypto assets, the data indicates that FDIC insurance coverage applies to all client funds (including crypto assets).
In the letter, the FDIC pointed out three instances in which OKCoin misrepresented its insurance status. One through an announcement where the exchange said it was licensed across the US with FDIC insurance on OKCoin accounts.
Moreover, according to the oversight, the exchange stated that the OKCoin-based Provenance Blockchain’s HASH token has received broad regulatory acceptance from the SEC, OCC, FED, and FDIC. The FDIC said the exchange has informed its US clients that it offers FDIC insurance on US dollar deposits.
OKCoin was given 15 days by the banking regulator to respond with written confirmation of its compliance with the directives issued. The regulator maintains that it is only focused on securing banks, and the same is not true of cryptocurrency companies with bank accounts.
FDIC guidelines
This is not the first time the banking regulator has accused crypto firms of allegedly making false claims that their accounts are insured with the agency. In 2022, the FDIC issued five cease and desist orders against several crypto companies, including the now bankrupt FTX.
“The Federal Deposit Insurance Act (FDI) prohibits any person from representing that an uninsured deposit is insured or from willfully misrepresenting the extent and manner of insuring a deposit or certificate under the FDI Act, positive statements being made by omitting material information,” the FDIC said.
Besides, the FDIC has ordered the collapsed cryptocurrency lender, Voyager Digital, to stop claiming that the government agency has insured its cryptocurrency funds. In the allegations, the FDIC said the alleged misrepresentation of facts by Voyager could have been relied upon by investors who invested with the company and did not have immediate access to their funds.
The US Federal Deposit Insurance Corporation (FDIC) has ordered OKCoin to remove misleading statements indicating that its customers’ accounts are insured through the government agency. The FDIC issued the order Thursday in a letter addressed to the exchange’s CEO, Hong Fang.
The FDIC has directed that OKCoin, a San Francisco-based exchange affiliated with OKX, immediately remove any infringing claims from its website. Failing, the banking regulator warned, it could face further enforcement action.
“OKCoin is not insured by the FDIC, and non-filed products are not insured by the FDIC,” the agency said in the cease and desist order. “By not distinguishing between USD deposits and crypto assets, the data indicates that FDIC insurance coverage applies to all client funds (including crypto assets).
In the letter, the FDIC pointed out three instances in which OKCoin misrepresented its insurance status. One through an announcement where the exchange said it was licensed across the US with FDIC insurance on OKCoin accounts.
Moreover, according to the oversight, the exchange stated that the OKCoin-based Provenance Blockchain’s HASH token has received broad regulatory acceptance from the SEC, OCC, FED, and FDIC. The FDIC said the exchange has informed its US clients that it offers FDIC insurance on US dollar deposits.
OKCoin was given 15 days by the banking regulator to respond with written confirmation of its compliance with the directives issued. The regulator maintains that it is only focused on securing banks, and the same is not true of cryptocurrency companies with bank accounts.
FDIC guidelines
This is not the first time the banking regulator has accused crypto firms of allegedly making false claims that their accounts are insured with the agency. In 2022, the FDIC issued five cease and desist orders against several crypto companies, including the now bankrupt FTX.
“The Federal Deposit Insurance Act (FDI) prohibits any person from representing that an uninsured deposit is insured or from willfully misrepresenting the extent and manner of insuring a deposit or certificate under the FDI Act, positive statements being made by omitting material information,” the FDIC said.
Besides, the FDIC has ordered the collapsed cryptocurrency lender, Voyager Digital, to stop claiming that the government agency has insured its cryptocurrency funds. In the allegations, the FDIC said the alleged misrepresentation of facts by Voyager could have been relied upon by investors who invested with the company and did not have immediate access to their funds.
