On Friday, the Federal Deposit Insurance Corporation (FDIC) sent letters to five entities demanding they stop making false and misleading claims about FDIC deposit insurance.
According to the letters sent to Atmos Financial, PBC (Atmos), ByBitcoinEx, Inc. (ByBitcoinEc), Organo Payments, Inc. and its subsidiary (OGPay) (OGPay), Horizon Globex GmbH (Horizon), which operates Upstream Exchange; and Zil Money Corporation (Zil) requested that the companies take immediate action to address the statements. The FDIC said the companies stated or suggested they are FDIC-insured or that uninsured financial products are insured by the FDIC; misused the FDIC name or logo; misrepresented the nature or extent of deposit insurance, or failed to clearly identify the insured depository institutions they have a relationship with that customer funds may be deposited into. The FDIC said the claims and omissions are false and misleading, and have the potential to harm consumers.
“Combatting misrepresentations about deposit insurance coverage goes to the heart of the FDIC’s mission of maintaining stability and public confidence in the nation’s banking system,” FDIC Chairman Martin J. Gruenberg said. “These practices can not only confuse and harm those who are targeted with the false promise of deposit insurance, but, if left unchecked, could also undermine confidence in the FDIC, FDIC–insured banks, and the U.S. banking system.”
The Federal Deposit Insurance Act prohibits any entity from claiming that an uninsured financial product is FDIC-insured or from knowingly misrepresenting the extent or manner of deposit insurance.