FDIC Calls Out Crypto Firms Over Insurance Claims

Source: American Banker

The Federal Deposit Insurance Corp. issued five cease-and-desist letters on Friday telling five cryptocurrency-related companies to stop making false and misleading statements about the availability of deposit insurance for their customers. 

The FDIC announced Friday afternoon that it had directed five companies behind certain crypto websites —  including FTX US, Cryptonews.com, Cryptosec.info, SmartAsset.com and FDICCrypto.com — to "take immediate corrective action to address false or misleading statements" concerning whether their customers' funds were insured by the federal agency.  

Under the Federal Deposit Insurance Act, the FDIC has the authority to prohibit use of the agency's name or logo to imply customer funds are government insured when they are not. Each of the letters — which were signed by FDIC assistant general counsel Seth Rosebrock — noted that the FDIC had the authority to assess civil money penalties as well.