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 supplies, cellular app, and another customer-facing publication inside 15 enterprise days and supply written affirmation of compliance.
FDIC deposit insurance coverage protects prospects 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 prospects’ deposits of as much as $250,000 in registered banks, offering a security internet in case of financial institution failures. Nevertheless, it doesn’t cowl digital property 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 publish 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 offered from OKCoin, have obtained regulatory approval from SEC, OCC, FED, and the FDIC.
Within the third occasion, OKCoin’s Chief Advertising Officer tweeted that OKCoin gives FDIC insurance coverage on USD deposits.
In accordance with the FDIC, these statements comprise false and deceptive representations concerning FDIC deposit insurance coverage and will mislead prospects.
“OKCoin isn’t FDIC-insured and the FDIC doesn’t insure non-deposit merchandise. By not distinguishing between U.S.-dollar deposits and crypto property, the statements indicate FDIC insurance coverage protection applies to all buyer funds (together with crypto property). As well as, the FDIC doesn’t insure or endorse explicit 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 each time doable. Okcoin is conscious of this matter and is taking quick motion to evaluate the statements flagged by the FDIC and tackle them as needed.”
In 2022, the FDIC issued comparable 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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