WASHINGTON —The FDIC has issued letters demanding five entities and certain associated parties cease and desist from making false and misleading statements about FDIC deposit insurance.
The FDIC is demanding that Atmos Financial, PBC (Atmos); BybitcoinEx, Inc. (BybitcoinEx); ORGANO Payments, Inc. and its subsidiary OGPay (OGPay); Horizon Globex GmbH (Horizon), which operates Upstream Exchange; and Zil Money Corporation (Zil) take immediate corrective action to address these false or misleading statements.
False Representations
According to the FDIC, based upon the information it has collected, the companies and certain associated parties made false representations by:
- Stating or suggesting that these entities are FDIC-insured or that certain uninsured financial products are insured by the FDIC
- Misusing the FDIC name or logo
- Misrepresenting the nature or extent of deposit insurance
- Failing to clearly identify the insured depository institutions with which they have a relationship for the placement of customer deposits and into which funds may be deposited. These material misrepresentations and omissions are false and misleading, and have the potential to harm consumers, the FDIC said.
What Law Says
The Federal Deposit Insurance Act (FDI Act) prohibits any person from representing or implying that an uninsured financial product is FDIC–insured or from knowingly misrepresenting the extent and manner of deposit insurance.
NCUA has encountered similar issues itself in the past, especially with online entities claiming to either be credit unions to carry NCUSIF insurance.
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