As per the latest revelations, the top cryptocurrency exchange OkCoin has been accused by US Federal Deposit Insurance Corp (FDIC) claiming that the exchange has produced misleading statements regarding customer protection. As per FDIC’s declaration, OkCoin has been manipulating that its customers are protected by the US banking regulator FDIC.
In a letter addressing Hong Fang, the CEO of OkCoin, FDIC posited that the exchange’s statements regarding its customer protection were manipulated and fabricated, denying any such alliance with the company.
The regulators mentioned some instances as evidence of the accusation. On OkCoin’s website, it is noted that the Provenance Blockchain’s HASH token on the exchange “received broad regulatory acceptance” from the regulators including SEC, FED, FDIC, and OCC. In 2020, the website updated that OkCoin is “Licensed across the US with FDIC insurance on OKCoin accounts”.
The agency also mentioned an official Twitter post by the Chief Marketing Officer at OkCoin, which stated that “if you are in the US we offer FDIC insurance on USD deposits”. The letter asserted that the statements are faulty, denying OkCoin’s FDIC-insured status. The agency reiterated that “these statements appear to contain false and misleading representations regarding FDIC deposit insurance”.
FDIC ordered the exchange to halt the “misleading representations” of FDIC insurance on OkCoin, stating, “We hereby demand that you cease and desist and take immediate corrective action to address these false and misleading statements”.
A spokesperson commented that the exchange would take immediate actions to comply with FDIC, quoting, “A core principle at OKCoin is to respect applicable laws and regulations”. He added that the company remains committed to “collaborating with stakeholders including regulators whenever possible”.
Previously, the regulators have sued the crypto exchange FTX and the bankrupt Voyager Digital for falsely representing FDIC’s acceptance. These companies too claimed that their products were insured by FDIC.
