FDIC Issues ‘Cease and Desist’ Order to OKCoin Crypto Exchange ZyCrypto

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In a June 15, 2023 press release, the Federal Deposit Insurance Corporation (FDIC) alleged that crypto exchange OKCoin USA Inc violated the Federal Deposit Insurance Act by making false and misleading statements regarding its insured status with the FDIC on its website and in a social media post.

Through a cease and desist letter, the FDIC asked OKCoin to address what it said were false and misleading statements. The FDIC said OkCoin claims to offer FDIC USD deposit insurance to its US customers.

The FDIC said OkCoins’ statements were likely misleading and potentially harmful to consumers. The FDIC has instructed OKCoin to immediately remove all information, representations, or references suggesting that OKCoin is FDIC insured.

The FDIC gave OKCoin 15 business days upon receipt of its cease and desist letter to provide written confirmation that it had fully compiled. Other companies that received cease and desist orders from the FDIC on June 15, 2023 were Bodega (Bodega Importadora de Pallets) and Money Avenue, LLC.

The FDIC has issued several cease and desist letters in the past to companies violating the federal deposit insurance law which prohibits any person or entity from stating or implying that an uninsured deposit is insured. under FDI law.

In August 2022, the FDIC issued letters demanding that five companies (Cryptonews.com, Cryptosec.info, SmartAsset.com, FTX.US, and FDICCrypto.com) and their officers, directors, and employees stop making false and misleading statements on the FDIC. deposit insurance.

In July 2022, the FDIC issued a cease and desist letter to Voyager Digital, LLC and its related entities for making false and misleading statements regarding Voyager’s deposit insurance status.

In the letter to Voyager, the FDIC said Voyager had made various representations on its website, mobile app, and social media accounts suggesting that it was FDIC insured and that the FDIC had insured customers against Voyager failure.

According to new rules shared by the UK’s Financial Conduct Authority (FCA) in a press release dated June 8, 2023, the FCA has asked crypto firms to ensure that investors have the knowledge and appropriate experience to invest in crypto.

The FCA has advised crypto companies marketing crypto assets to UK consumers to provide a cooling-off period for new investors to provide more consumer protection. Consumer protection is central to the formation of crypto regulations.

The FCA has further instructed companies promoting crypto to use transparent and fair advertisements and put in place clear risk warnings that are not misleading. The FCA has asked for more guidance from companies advertising crypto to UK consumers.

The conduct of crypto businesses remains under the scrutiny of financial regulators and watchdogs.

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