The U.S. Federal Deposit Insurance coverage Corp. (FDIC) has issued a stop and desist letter to OKCoin, warning the change about deceptive statements concerning its insurance coverage standing.
In a June 15 letter, the FDIC alleged that the change and its senior executives made false representations stating or suggesting that sure crypto-related merchandise had been FDIC-insured.
The company ordered the change to take away these claims from its web site, social media accounts, advertising and marketing supplies, cellular app, and every other customer-facing publication inside 15 enterprise days and supply written affirmation of compliance.
FDIC deposit insurance coverage protects clients by offering protection for his or her deposits within the unlikely occasion of the failure of an FDIC-insured financial institution. The federal company insures clients’ deposits of as much as $250,000 in registered banks, offering a security web in case of financial institution failures. Nonetheless, it doesn’t cowl digital belongings deposits.
FDIC cites cases of misrepresentation
The company cited three cases of deceptive statements made by OKCoin regarding its insurance coverage standing. These included a weblog put up commercial the place the change claimed it was licensed throughout the U.S. and its accounts had FDIC insurance coverage.
One other occasion cited by the regulator concerned the change’s assertion that the Provenance Blockchain, and its HASH utility token, which is accessible from OKCoin, have acquired regulatory approval from SEC, OCC, FED, and the FDIC.
Within the third occasion, OKCoin’s Chief Advertising Officer tweeted that OKCoin affords FDIC insurance coverage on USD deposits.
Based on the FDIC, these statements comprise false and deceptive representations concerning FDIC deposit insurance coverage and will mislead clients.
“OKCoin will not be FDIC-insured and the FDIC doesn’t insure non-deposit merchandise. By not distinguishing between U.S.-dollar deposits and crypto belongings, the statements indicate FDIC insurance coverage protection applies to all buyer funds (together with crypto belongings). As well as, the FDIC doesn’t insure or endorse specific blockchains.”
An OKCoin spokesperson advised CryptoSlate that:
“A core precept at Okcoin is to respect relevant legal guidelines and laws, and we stay dedicated to collaborating with stakeholders together with regulators at any time when doable. Okcoin is conscious of this matter and is taking speedy motion to evaluate the statements flagged by the FDIC and handle them as mandatory.”
In 2022, the FDIC issued related notices to FTX.US and Voyager Digital.
Up to date with OKCoin’s assertion on June 16 at 16:25 UTC.
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