In a June 15, 2023 press release, the Federal Deposit Insurance Corporation (FDIC) alleged that the 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 requested OKCoin to address what it referred to as false and misleading statements. The FDIC said that OkCoin claimed to offer FDIC insurance of USD deposits for its US customers.
The FDIC said OkCoin’s statements were likely misleading and potentially harmful to consumers. The FDIC requested OKCoin to immediately remove all information, representations, or references suggesting that OKCoin is FDIC-insured.
The FDIC gave OKCoin 15 business days on 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 firms contravening the Federal Deposit Insurance Act that prohibits any person or entity from representing or implying that an uninsured deposit is insured under the FDI Act.
In August 2022, the FDIC issued letters demanding five companies(Cryptonews.com, Cryptosec.info, SmartAsset.com, FTX.US, and FDICCrypto.com) and their officers, directors, and employees to stop making false and misleading statements about 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 concerning Voyager’s deposit insurance status.
In the letter to Voyager, the FDIC said that 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 the failure of Voyager.
According to the new rules shared by the UK’s Financial Conduct Authority’s (FCA) in a press release dated June 8, 2023, the FCA requested crypto firms to ensure investors have the appropriate knowledge and experience to invest in crypto.
The FCA advised crypto firms marketing crypto assets to UK consumers to offer a cooling-off period for first-time investors to offer more protection to consumers. Consumer protection is at the heart of the formation of crypto regulations.
The FCA further requested firms promoting crypto to use transparent and fair adverts and to put in place clear risk warnings that are not misleading. The FCA asked for more guidance for firms advertising crypto to UK consumers.
The conduct of crypto firms remains under scrutiny by financial regulators and watchdogs.