InfoBytes Blog
FDIC orders entities to stop making fraudulent deposit insurance representations
On February 15, the FDIC sent letters to four entities demanding that they stop making false or misleading representations about FDIC deposit insurance. Letters were sent to a cryptocurrency exchange and to a nonbank financial services provider demanding that the entities cease and desist from making false and misleading statements about FDIC deposit insurance and take immediate corrective action to address these statements. The FDIC also sent letters to two websites ordering them to remove similar false and misleading statements claiming that the crypto exchange and the nonbank financial services provider are FDIC-insured and that FDIC insurance will protect customers’ cryptocurrency or protect customers in the event of the nonbank’s failure. Under the Federal Deposit Insurance Act, persons are prohibited “from representing or implying that an uninsured product is FDIC-insured or from knowingly misrepresenting the extent and manner of deposit insurance.”