The Federal Deposit Insurance Corporation (FDIC) has issued letters to five companies regarding misleading crypto-related false or misleading deposit insurance representations.
Based upon evidence collected by the agency, the FDIC forwarded correspondence to Cryptonews.com, Cryptosec.info, SmartAsset.com, FTX US, and FDICCrypto.com, their officers, directors, and employees, ordering a cease and desist from making false and misleading statements about FDIC deposit insurance, as well as immediate corrective action to address the statements.
According to the FDIC, each company made false representations on their websites and social media accounts, noting or suggesting certain crypto-related products are FDIC–insured or that stocks held in brokerage accounts are FDIC–insured.
The Federal Deposit Insurance Act (FDI Act) prohibits any person from representing or implying that an uninsured product is FDIC–insured or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act further prohibits companies from implying that their products are FDIC–insured by using “FDIC” in the company’s name, advertisements, or other documents.
The FDIC noted consumers can determine if an institution is FDIC–insured by consulting an institution representative, looking for the FDIC sign at the institution, or using the FDIC’s BankFind tool.
Additionally, per the FDIC, general deposit insurance information can be obtained via the frequently asked questions section of its website addressing resources.