Okcoin was warned by FDIC for advertising material

Okcoin was warned by FDIC for advertising material

The California, based in OKX, Krypto exchange OKCOIN USA Inc. has received a letter from the FDIC in which it is asked to no longer use the name of the authority to strengthen its legitimacy.

possible FDIA violation

In the letter directed at Hong Fang, CEO of OKCOIN, the stock exchange warned that it may violate section 18 (a) (4) of the Federal Deposit Insurance Act (FDIA).

This section of the FDIA prohibits companies and individuals the claim that an insert that has not been insured or potentially insured in the FDIC is actually covered by the FDIC, be it in advertising materials or documents. In the case of OKCOIN, the FDIC has now clarified that there is no insurance.

"OKCOIN is not FDIC insured and the FDIC does not assure any products without a deposit. Since it is not distinguished between US dollar deposits and crypto assets, the statements that FDIC insurance protection applies to all customer funds (including crypto assets). In addition, the FDIC does not support any specific blockchain. Misory of statements that consumers and possibly harm them. ”

According to the FDIC, OKCOIN did this on three different occasions, including a Twitter contribution that was apparently deleted-in which the company's Chief Marketing Officer claimed that deposits were insured by the agency in the USA. The following tweet is the one who is linked to the letter from the FDIC. A search in the internet archive after the original tweet did not result in any results.

enter the cooo from okcoin at @jasonklau and cmo @Haidersf & a special guest of @Blockstack for a okoin to be the first US exchange Listed is Mark your questions okoinama

Now register: https://t.co/8hpaaab0ia pic.twitter.com/9ynhwcykln

-okcoin (@okcoin) 15. December 2020

The right to FDIC insurance is still listed in an advertising blog contribution written by OKCOIN.

FDIC campaign in accordance with earlier statements

This is not the first time that the FDIC crypto -related companies are no longer ordering the institution to give their platforms legitimacy. Last year five stock exchanges were served with similar letters, including FTX and Voyager Digital.

The regulatory authority has also published general guidelines that crypto companies have to adhere to when they contact the FDIC.

According to the current guidelines, customers of a failed crypto platform are only saved if the bank's bank already has an insured account. In addition, it is expressly pointed out that Neobanken is not covered by the FDIC insurance.

"FDIC insurance does not protect the customers of a non-bank from the failure, bankruptcy or bankruptcy of non-bank companies, including crypto depot banks, stock exchanges, brokers, wallet providers or other companies that seem to be reflected in, but are not." "Neobanken."

okcoin now has 15 working days to remove all the mentions of the FDIC insurance on its platform and on the accounts of its employees. Otherwise, the FDIC will take legal action against the stock exchange.

.