FDIC cracks down on deceptive insurance statements by OKCoin

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The US Federal Deposit Insurance policy Corp. (FDIC) issued a stop and desist letter to crypto exchange OKCoin above deceptive statements pertaining to the exchange’s insurance policies status.

In a letter dated June 15, the FDIC accused OKCoin and its senior executives of generating false representations that selected crypto-similar products and solutions were being FDIC-insured.

The company has requested OKCoin to take away these misleading statements from its internet site, social media accounts, advertising elements, cell app, and other customer-struggling with publications within 15 company times. Moreover, OKCoin must supply prepared confirmation assuring the FDIC of their prompt compliance.

The FDIC’s deposit insurance is generally intended to address customers’ deposits in the occasion of a failure of an FDIC-insured lender, presenting a protecting embrace of up to $250,000. Nevertheless, this comforting security blanket does not stretch to digital asset deposits.

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The FDIC called out OKCoin on three cases wherever the exchange spun tales about its coverage status. These instances provided a weblog put up ad suggesting that the exchange held licenses spanning the US and carried the coveted FDIC insurance policies for its accounts.

Additionally, OKCoin suggested that the Provenance Blockchain and its HASH utility token, obtainable on the platform, had acquired regulatory approval from the SEC, OCC, FED, and the FDIC.

Lastly, OKCoin’s Chief Advertising Officer tweeted that the trade presented FDIC insurance plan on USD deposits.

The assertion from the regulator reads,

“OKCoin is not FDIC-insured and the FDIC does not insure non-deposit items. By not distinguishing among US-greenback deposits and crypto belongings, the statements suggest FDIC insurance policies protection applies to all purchaser resources (such as crypto property). In addition, the FDIC does not insure or endorse specific blockchains.”

Regulator aligns steps with prior statements

This is not the very first time the FDIC has taken action against crypto-associated corporations for falsely associating them selves with the institution. Final yr, similar cease and desist letters had been dealt to five exchanges, including FTX.US and Voyager Electronic.

In light-weight of these the latest developments, the FDIC has also posted common suggestions for crypto organizations to comply with when referencing the company.

The guidelines explain that FDIC insurance policies only safeguards clients in the event of a default, insolvency, or bankruptcy of a financial institution wherever the exchange retains an insured account. In addition, it explicitly states that neobanks are not protected by FDIC coverage.

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The US Federal Deposit Insurance Corp. (FDIC) has taken action against cryptocurrency exchange OKCoin, issuing a cease and desist letter over misleading statements regarding the exchange’s insurance status.

The U.S. Federal Deposit Insurance Corp. (FDIC) has issued a cease and desist letter to OKCoin, warning the exchange about misleading statements regarding its insurance status. In a  June 15 letter, the FDIC alleged that the exchange and its senior executives made false representations stating or suggesting that certain crypto-related products were FDIC-insured. The agency ordered the exchange to…

Okcoin suspends Miami and New York’s CityCoins

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Okcoin has suspended buying and selling of New York’s and Miami’s crypto CityCoins as of March 16, 2023, simply because of minimal token liquidity.

Okcoin, a crypto trade system, introduced that it would no for a longer period facilitate investing, getting, or promoting of MiamiCoin (MIA) and NYCCoin (NYC) from March 16, 2023, at 11:59 pm PST.

The self-proclaimed “global cryptocurrency trade with the least expensive expenses around” mentioned the suspension would remain unspecified right up until Okcoin safely and securely restores trading.

NYCCoin and MiamiCoin suspended on Okcoin

Okcoin cited prospective fraud hazards and cost manipulation for the suspension. Buying and selling will only resume if Okcoin addresses all the probable challenges and has recognized methods to secure the platform end users.

Having said that, the system permitted the keeping, withdrawal, and buying and selling of these coins on the ALEX decentralized exchange. NYC or MIA holders are certain of their coins’ basic safety and are secured by the platform’s field-foremost security.

“Low liquidity risk” considerations

Okcoin explained that its security team pointed out that the platform’s trade marketplaces for MIA and NYC had unforeseen minimal liquidity ranges. The crew raised worries that spiteful, third-celebration actors may possibly launder siphoned cash, manipulate selling prices, and commit other frauds. 

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Even though a single of the frauds has occurred, Okcoin desires to remain vigilant, contacting for enhanced CityCoins liquidity from market makers and suspension ahead of the deficit is rectified.

The platform aims to safeguard its integrity by securing user cash as a result the announcement. 

CityCoins are local, decentralized, programmable currencies made by Patrick Stanley, Blockstack’s former Head of Expansion. 

MiamiCoin (MIA) and NYCCoin (NYC) are endorsed by the respective cities’ mayors, who campaigned that digital assets had a larger excellent for modern society. The cash are proof-of-perform cash, and end users can freely mine them. Nonetheless, there is an incentive with mining the coins – 30% of the charges invested on the mining will go to the city. 

New York Metropolis and Miami are the initially cities to authorize and launch CityCoins. Okcoin is the only centralized trade system permitting trading of the CityCoins, and ALEX is the affiliated decentralized exchange. 

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Okcoin has suspended trading of New York’s and Miami’s crypto CityCoins as of March 16, 2023, because of limited token liquidity.