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OKCoin Next on US Regulator's Radar, Here's What's New

Fri, 06/16/2023 - 09:44
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Godfrey Benjamin
US FDIC has accused OKCoin of making false representations to customers
OKCoin Next on US Regulator's Radar, Here's What's New
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An American crypto exchange and subsidiary of OKX has been flagged by the United States Federal Deposit Insurance Commission (FDIC).

OKCoin called out for misrepresentation

As contained in the letter shared by the FDIC with OKCoin CEO Hong Fang, the company has been falsely representing itself as being covered by a regulator known for insuring financial institutions operating in the U.S.

The FDIC highlighted three instances where the exchange has made such false claims, including when it noted on its website that the Provenance Blockchain's HASH token on OKCoin had "received broad regulatory acceptance from the SEC, OCC, FED, and the FDIC." Additionally, the FDIC flagged an instance in 2020, where OKCoin said on its website that it is "Licensed across the US with FDIC insurance on OKCoin accounts."

The FDIC also referred to a Twitter post from the company in which it told its followers that "if you are in the US we offer FDIC insurance on USD deposits." The regulator is now categorically stating that OKCoin is not insured and that its broad coverage is offered to banking institutions operating in the country and not for crypto trading platforms.

Jim Cramer Expresses Concern Over CFTC Complaint Against Binance

Notably, the FDIC has sent related warnings to other crypto firms, including the now defunct Voyager Digital. The regulator said having an account with an FDIC-insured bank is not the same as being protected directly by the commission.

Trouble for OKCoin?

OKCoin being flagged by the FDIC is a warning that, if the right measures are taken, the trading platform may escape being charged by the regulator. The FDIC has asked the exchange to take down all incorrect claims it made and make reparations.

Exchanges have been on the radar of American regulators thus far this year, with the likes of Kraken and Bittrex making settlements with the U.S. SEC. Binance exchange has also been charged by both the SEC and the CFTC in what appears to be a long battle ahead for the trading platform.

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About the author

Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on, Cryptonews and Coingape, among others.