FDIC Investigates Potential Violations of Federal Deposit Insurance Act by OKCoin USA Inc.

The Federal Deposit Insurance Corporation (FDIC) has initiated an investigation into OKCoin USA Inc. (OKCoin) and its senior executives for alleged false and misleading statements regarding 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 C.F.R. Part 328, Subpart B.

The FDI Act and Part 328 prohibit individuals or entities from misrepresenting the insured status of deposits or knowingly providing false information about the extent and manner 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’s investigation focuses on statements made by OKCoin on its website and social media platforms. The company’s claims that it is “Licensed across the US with FDIC insurance on OKCoin accounts” and that it provides “FDIC insurance for all USD deposits” are under scrutiny. Additionally, OKCoin’s Chief Marketing Officer made a social media post on Twitter stating, “If you are in the US we offer FDIC insurance on USD deposits.”

These statements allegedly 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 that the FDIC does not insure non-deposit products or endorse particular blockchains.

The FDIC has demanded corrective action from OKCoin, which includes the immediate removal of all statements that suggest FDIC insurance coverage in any form other than specified by the FDI Act. OKCoin is also required to cease making any false or misleading statements about its insured status while providing clear information about the insured depository institution (IDI) with which it has a relationship for deposit placement.

OKCoin has been given fifteen business days to respond to the FDIC’s demands and provide written confirmation of compliance. Failure to respond or address the concerns raised may result in further actions being taken by the FDIC in accordance with the FDI Act.

The FDIC’s investigation is limited to potential violations of Section 18(a)(4) and Part 328 of the FDI Act. The outcome of this matter may not affect the FDIC’s assessment of other violations, nor does it prevent other federal or state agencies from pursuing actions related to potential violations of other laws and regulations.


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Okcoin Halts U.S. Dollar Deposits After Signature Bank Shutdown

Okcoin, the U.S. affiliate of cryptocurrency exchange OKX, announced on March 13 that it had no exposure to defunct U.S. tech bank Silicon Valley Bank (SVB). However, Okcoin CEO Hong Fang stated that the platform’s U.S. dollar wire and ACH deposits had been “immediately paused” due to the regulatory intervention in Signature Bank, Okcoin’s primary partner for customer transactions in dollars.

On March 12, New York state regulators closed Signature Bank, a major financial institution for fiat-crypto on-ramping, citing a “systemic risk exception” in the wake of SVB’s collapse. In addition to suspending dollar deposits, Fang wrote that “over-the-counter services will be temporarily paused too,” including its quick buy and recurring buy functions. Okcoin also stated that the suspension extends to “crypto transactions by credit card” and “trading USD-crypto trading pairs.”

Fang reassured users that “all corporate and all customer funds are safe” and that “USD withdrawal not affected. The processing pace will be subject to bank operation.” All crypto deposit and withdrawal functions remain intact, including those of U.S. dollar-pegged stablecoins. Furthermore, the suspension appears limited to dollar deposits, as other fiat deposit methods, such as those made in euros, are unaffected.

Okcoin is working to find alternative channels and solutions in real-time, and the suspension is not expected to impact crypto transactions significantly. Fang emphasized the platform’s commitment to its users, stating, “If this weekend has told us anything, it’s the significance of the future that we are building. Our commitment to you hasn’t changed either.”

The crypto-friendly Signature Bank was a key partner for many crypto firms, including Coinbase, Celsius, and Paxos, which have since disclosed that they held balances in the bank. U.S. federal regulators have stated that Signature Bank depositors will receive their balances in full post-shutdown.

The shutdown of Signature Bank has raised concerns in the crypto community about the risks associated with fiat-crypto on-ramping and the importance of selecting reliable banking partners. While Okcoin has assured its users that their funds are safe, the incident highlights the need for greater transparency and accountability in the crypto industry.


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HK-based Spending App Offers Crypto Rebate for Customers

Hong Kong-based startup, Bloom announced its collaboration with cryptocurrency exchange Okcoin to offer token rebates and introduce a gamified retail experience to its clients.


Digital payment in Hong Kong is becoming more common in people’s daily life. To break through the current spending landscape in the city dominated by credit card and their cash rebates or reward points mechanism, the spending app has offered a reward scheme to get a spending rebate in terms of cryptocurrency.

Customers now have more options to gain rewards and even take a glimpse of the crypto space. By partnering with Visa credit card, it allows customers to convert their spending credits into crypto according to the latest price.

Per the press release, the scheme now supports over 10 mainstream cryptocurrencies, including Bitcoin, Ethereum and Dogecoin.

According to the company’s website, the company “aims to provide personalized spending rewards from cash rebates to digitalized coupons to consumers by connecting partner brands and card issuers.”

Eddie Rong, the founding member of Bloom, welcomed the partnership with Okcoin and wishes more customers might embrace the crypto space, “With the increasing awareness of cryptocurrencies in Hong Kong, although the cryptocurrency market has been volatile recently, we seek to build a platform for beginners on top of an exciting spending experience, empowering members to save cryptocurrencies and shop at the same time.”

The app offers a HK$10 worth of Bitcoin bonus for customers who connect their first Visa credit card to their account or conduct their first transaction in this program, according to the official website.

The company said its app integrates real-time data via an application programming interface (API) to help its members stay on trend in the cryptocurrency space. Furthermore, the app allows the withdrawal of cryptocurrencies to designated crypto wallets or covert them into Bloom Coins for in-app redemption of nonfungible tokens (NFT), e-coupons, and fashionable collectables, without being charged, and members could choose their preferred way of keeping rewards at no costs.

The company believes the new platform “will help democratise crypto and lay the foundation for them to play a more important role in the financial system.”

Meanwhile, their counterpart Okcoin will provide zero-fees account opening services to their clients, encouraging them to adopt their crypto trading services.

“The combination of Bloom’s rewards program and easy-to-use spending product provides an ideal avenue for new and existing crypto users to interact with digital assets every day, and we’re glad to help make this possible,” Khairi Azmi, general manager of Okcoin (Asia) said, adding that the platform would make crypto to be more common and “regular to go mainstream across the world” among ordinary people daily life.

Crypto adoption is expected to expand to the retail level among the institutional investment market in the city. According to a recent study, Hong Kong is marked as the top-rank region or economy in terms of the level of crypto readiest, as the city enjoys the highest number of blockchain startups per 100,000 people and the number of crypto ATMs proportional to the population.

Image source: Bloom


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Crypto Exchange Okcoin Launches a Free Trading NFT Marketplace

To tap into the non-fungible token (NFT) craze, crypto exchange Okcoin has established a marketplace that will attract no transaction fees.  

The free trading NFT marketplace is expected to offer creators significant agency when selling their work since royalty rates range from 0-10% in other marketplaces.

Hong Fang, Okcoin’s CEO, acknowledged:

“We’re launching a free market for NFTs where prices and profits will be determined by supply and demand, more so than anywhere else. Web3 is about restoring economic power to the people.”

The San-Francisco-based crypto exchange will offer NFTs from famous collections like Crypto Punks, the Bored Ape Yacht Club (BAYC), Boss Beauties, and World of Women. 

To adhere to the “crypto for all” objective, the marketplace will also showcase collections from previously marginalised creators in the traditional finance and tech innovation fields. 

Fang noted:

“In the same way that blockchain technology empowers financial freedom with cryptocurrency, it empowers creators with NFTs.”

Minting of NFTs usually takes place on Binance, OKC, Polygon, and Ethereum blockchains. Therefore, users will have the chance to link external wallets like MetaMask, enabling them to trade NFTs.

Randi Zuckerberg, Okcoin’s brand advisor, sees the marketplace as a stepping stone towards making crypto more accessible. He added:

“Making NFTs more inclusive is something I’ve dedicated myself and my company HUG to because we know there are huge opportunities for both creators and collectors in NFTs waiting to be unlocked.”

Crypto exchanges are gearing up for the NFT marketplace based on announcements from Gemini, Kraken, and Coinbase. For instance, the launch of the Coinbase NFT marketplace is expected to tie with the Bored Apes entering the movie scene in June. 

Furthermore, different brands are entering the non-fungible token sector for various reasons. For example, Nestle, a Swiss multinational food and drink processing conglomerate, recently released NFTs for a charitable cause in the Middle East & North Africa. 

Image source: Shutterstock


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Brazilian Crypto Exchange Foxbit Raises $21M in Series A funding, Led by OK Group

Cryptocurrency exchange Foxbit operating in Brazil, which is trading Bitcoin, Ether, Litecoin, TrueUSD and XRP etc, has announced that it has raised $21 million in a Series A round led by OK Group, owner of cryptocurrency exchange Okcoin.

Foxbit on Tuesday said that the funds raised will be used to develop new technologies, expand the company’s products and technical teams, and potential acquisitions, and will focus on reducing transaction fees by integrating blockchain networks and attracting more Brazilian investment.

João Canhada, CEO of Foxbit said in a statement that:

“The company has evolved a lot in recent years and together with my partners we understood that this investment was now a necessary step to further improve the services provided to our customers.”

Foxbit was founded on Dec 10, 2014, by the company’s CEO João Canhada, Luís Augusto Schiavon Ramos. Prior to this Series A funding, Foxbit has raised a total of $130K in funding over two rounds. The last funding was raised on Apr. 1, 2016, from a Seed round.

Image source: Shutterstock


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Okcoin hires former Facebook spokesperson Randi Zuckerberg to grow female user base

Cryptocurrency exchange Okcoin has announced Randi Zuckerberg — the sister of Meta CEO Mark Zuckerberg — will be joining the platform’s brand advisory council in its aim to bring more women into crypto.

In a Thursday announcement, Okcoin said that in addition to hiring Zuckerberg, the exchange would be committing $1 million in an attempt to reach a 50% female user base by 2025. Zuckerberg was the former director of market development and a spokesperson for Facebook until she resigned in 2011, moving on to start her own social media firm in addition to founding the Zuckerberg Institute — a program aimed at educating business leaders, entrepreneurs and students.

“Crypto and this new era of wealth creation should be open to everyone,” said Zuckerberg in a video promoting her move to the crypto exchange. “I’ve joined Okcoin’s advisory council to support that mission and bring more women into the world of crypto.”

With the hiring of Zuckerberg, Okcoin will have many women in key leadership positions at the exchange, including CEO Hong Fang as well as head of content and brand Mandy Campbell. Fang told Cointelegraph last year the crypto exchange had seen a significant influx of women in 2020, with 50% of female users to the platform in the first quarter being new.

“Historically, women and other marginalized groups have been locked out of the traditional financial system,” said Fang on the $1 million commitment. “Cryptocurrency is turning this norm on its head through the wealth-creating opportunities created by decentralized finance, but we’re still seeing lower adoption among women.”

Related: Women-led events may encourage long-term female participation in blockchain

Founded in 2013, Okcoin is one of the world’s oldest crypto exchanges and has steadily expanded to serve customers in more than 190 countries. Though its headquarters are based in the United States, the exchange secured regulatory approval to operate in Malta and the Netherlands in July.