FDIC accuses OKCoin of misleading customers about deposit insurance

FDIC accused the bitcoin exchange OKCoin of making misleading statements about deposit insurance.

The regulator required the platform to remove posts implying that the agency protects customers’ accounts.

The agency cited several examples. In particular, the exchange’s site mentions “approval by the SEC, OCC, Fed and the FDIC token HASH.” In 2020 the company described itself as “licensed to operate across the United States with FDIC insurance on OKCoin accounts.”

Also, the exchange’s official Twitter account asserted that it offers American clients agency-backed guarantees for deposits.

In a letter to CEO Hong Wang, the agency threatened possible coercive action for violations of U.S. banking law should the demand not be met.

“Not drawing a distinction between deposits in US dollars and cryptocurrencies, the statements imply that FDIC insurance covers all client funds (including digital assets),” the document states.

Earlier, the agency made similar claims against Voyager Digital and FTX.US.

In May, FDIC Chairman Martin Gruenberg named cryptocurrencies as one of the causes of the difficulties faced by Signature Bank.

Adrienne Harris, a representative of the New York state banking regulator, refuted the suggestion that Signature Bank collapsed due to ties to the crypto industry. According to her, the bank’s collapse was the result of panic among customers, which was triggered by the closure of Silicon Valley Bank.

“Not drawing a distinction between deposits in US dollars and cryptocurrencies, the statements imply that FDIC insurance covers all client funds (including digital assets),” the document states.

Earlier, the agency made similar claims against Voyager Digital and FTX.US.