The Federal Deposit Insurance Corporation (FDIC) has launched an investigation into OKCoin USA Inc. (OKCoin) and its senior executives for allegedly making false and misleading statements about the company’s insured status. According to the FDIC’s legal division, OKCoin may have violated Section 18(a)(4) of the Federal Deposit Insurance Act (FDI Act) and its implementing regulation, 12 CFR Part 328, Subpart B.

The FDI Act and Part 328 prohibit any person or entity from misrepresenting the insured status of deposits or knowingly providing false information about the scope and form of deposit insurance. The FDIC has the authority to enforce these provisions, including issuing cease and desist orders and imposing civil money penalties.

The FDIC investigation focuses on statements made by OKCoin on its website and social media platforms. The company’s claims that it is “licensed in the US with FDIC insurance on OKCoin accounts” and that it provides “FDIC insurance for all USD deposits” are under scrutiny. Additionally, OKCoin’s CMO made a social media post on Twitter stating, “If you’re in the US, we offer FDIC insurance on USD deposits.”

These statements purportedly imply that OKCoin itself is FDIC insured, that all customer funds, including crypto assets, are covered by FDIC insurance, and that the FDIC endorses a specific blockchain. However, the FDIC clarifies that OKCoin is not FDIC insured and the FDIC does not insure non-deposit products or endorse particular blockchains.

The FDIC has required corrective action from OKCoin, including the immediate removal of all statements suggesting FDIC insurance coverage in any manner other than as specified by the FDI Act. OKCoin is also required to stop making false or misleading statements about its insured status while providing clear information about the Insured Depository Institution (IDI) with which it has a deposit placement relationship.

OKCoin has fifteen business days to respond to the FDIC’s demands and provide written confirmation of compliance. Failure to respond or address concerns raised may result in the FDIC taking further action under the FDI Act.

The FDIC’s investigation is limited to possible violations of Section 18(a)(4) and Part 328 of the FDI Act. The outcome of this matter may not affect the FDIC’s evaluation of other violations, or prevent other federal or state agencies from taking action related to potential violations of other laws and regulations.