FDIC warns OKCoin about deceiving customers with protection claims

OKCoin faces accusations of making false claims on three separate instances that is FDIC-insured

article-image

Dennis Diatel/Shutterstock, modified by Blockworks

share

The Federal Deposit Insurance Corporation (FDIC) slammed crypto exchange OKCoin with a demand to halt misleading claims about being insured.

Under the Federal Deposit Insurance Act, it is against the law to misrepresent uninsured deposits as insured or provide false information about the coverage.

In a letter to OKCoin CEO Hong Fang on Thursday, the FDIC pointed out three instances where the exchange was accused of making false claims. The agency has the authority to issue cease-and-desist orders and impose civil penalties for violations.

A blog from 2020 shows San Francisco-based OKCoin saying that it is “licensed across the US with FDIC insurance on OKCoin accounts” as one of the top 10 reasons to choose its platform.

On the website, they also claimed that the Provenance blockchain’s HASH token on OKCoin had gained regulatory acceptance from entities including the FDIC.

Further, the FDIC also cited a Twitter post where OKCoin’s chief marketing officer and its affiliated exchange OKX claimed that “if you are in the US, we offer FDIC insurance on USD deposits.”

“In fact, OKCoin is not FDIC-insured and the FDIC does not insure non-deposit products,” the letter said. 

“By not distinguishing between US-dollar deposits and crypto assets, the statements imply FDIC insurance coverage applies to all customer funds (including crypto assets).” The agency also mentioned that it does not endorse or support any specific blockchains.

An OKCoin spokesperson told Blockworks that the platform is aware of this matter and is taking action to assess the FDIC’s statements.

“A core principle at Okcoin is to respect applicable laws and regulations, and we remain committed to collaborating with stakeholders including regulators whenever possible,” they added.

FDIC protection excludes crypto custodians and exchanges

Several other companies, including Voyager and FTX US, have also earlier received cease and desist letters from the FDIC.

The FDIC has clarified in the past that its protections kick in when an insured bank fails, but they don’t cover crypto custodians, exchanges, or wallet providers.

Crypto platforms aren’t the only ones without FDIC insurance. Apps like Venmo, Cash App, and PayPal are also deemed risky for storing cash.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

The goal, per Santiago Santos, is to make crypto a relatable piece of tech for people who may not even understand it

article-image

Stripe stablecoin unit aims to operate under a federal charter enabling regulated stablecoin issuance and custody services

by Blockworks /
article-image

Will TradFi make crypto better or create more problems than it solves?

article-image

Subtle decisions by risk curators saved Aave from significant turmoil

article-image

The new Rootstock Institutional unit aims to connect professional investors to Bitcoin-native yield and liquidity strategies anchored in BTC’s security layer

by Blockworks /
article-image

DOJ files record civil forfeiture against more than 127,000 BTC linked to scam activity

by Blockworks /