- The warning letter was despatched by the FDIC to OKCoin CEO Hong Fang.
- The company has a algorithm that cryptocurrency firms should implement.
The FDIC has warned OKCoin USA Inc., a California-based cryptocurrency change affiliated with OKX, to keep away from utilizing the FDIC identify to bolster its validity. The letter, despatched to OKCoin CEO Hong Fang, expressed concern that the platform might have violated Part 18(a)(4) of the FDIA.
As well as, any commercial or different doc suggesting that uninsured or probably uninsured deposits are protected by the FDIC violates this provision of the FDIA. The FDIC has now formally introduced that no insurance coverage is out there within the case of OKCoin.
Complete rule set
The FDIC alleges that in three totally different situations, together with the now-deleted tweet, OKCoin executives misrepresented that clients’ financial savings have been protected by the FDIC. Nonetheless, OKCoin’s promotional weblog put up nonetheless contains his FDIC insurance coverage declare.
The Federal Deposit Insurance coverage Company (FDIC) has beforehand warned cryptocurrency firms concerning the risks of claiming approval from them. In the course of the earlier yr, comparable sorts of letters have been delivered to 5 different exchanges, together with FTX and Voyager Digital.
In terms of coping with the FDIC, the FDIC has developed complete guidelines for cryptocurrency companies to observe.
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