US FDIC Says OKCoin Made False Statements About Deposit Insurance coverage and Calls for Corrections

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The US Federal Deposit Insurance coverage Company despatched a letter to OKCoin USA, Inc., demanding the cryptocurrency change take motion to handle false and deceptive statements about its deposit insurance coverage.

The FDIC despatched three letters to OKCoin USA, Inc., Bodega Importadora de Pallets and Cash Avenue LLC, on Thursday, making these calls for, and warning that sure statements might hurt customers. 

“The FDIC has noticed an growing variety of situations on-line the place corporations or people have misused the FDIC’s title or brand, or have made false or deceptive representations about deposit insurance coverage,” stated FDIC Chairman Martin J. Gruenberg in a assertion. “These practices can confuse customers about whether or not they’re coping with an insured establishment and if they’re protected by deposit insurance coverage.”

Deceptive statements

The FDIC stated OkCoin and its senior executives made these deceptive statements a number of occasions.

For instance, OkCoin stated in a publish that it was “licensed throughout the US with FDIC insurance coverage on OKCoin accounts,” the FDIC stated. 

The company additionally stated the change’s chief advertising officer tweeted that an affiliated change provided FDIC insurance coverage.

The FDIC ordered the change to take away all statements that indicate that OKCoin is FDIC-insured, that the FDIC has ever endorsed any specific blockchain, amongst different treatments. 

The change has 15 enterprise days to ship the FDIC written affirmation that it complied with requests.

The FDIC solely insures deposits held at insured banks and financial savings associations, not at crypto firms, and may insure as much as not less than $250,000. 

In a July 2022 reality sheet, the company additionally famous that deposit insurance coverage doesn’t apply to monetary merchandise equivalent to shares, bonds, commodities or crypto property. 

“Along with potential shopper hurt, buyer confusion can result in authorized dangers for banks if a crypto firm, or different third-party associate of an insured financial institution with whom they’re dealing, makes misrepresentations in regards to the nature and scope of deposit insurance coverage,” the FDIC stated in a associated advisory final 12 months. 

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