WASHINGTON–The FDIC has sent letters to five companies alleging “false and misleading” statements that their stock or crypto-based products carry federal deposit insurance. One of the companies even uses “FDIC” in its online domain name.
The letters sent to the companies’ officers, directors, and employees state to cease and desist from making false and misleading statements about FDIC deposit insurance and “take immediate corrective action to address these false or misleading statements.”
The warnings have been sent to Cryptonews.com, Cryptosec.info, SmartAsset.com, FTX.US and FDICCrypto.com.
“Based upon evidence collected by the FDIC, each of these companies made false representations—including on their websites and social media accounts—stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured,” the agency said. “In one case, a company offering a so-called cryptocurrency also registered a domain name that suggests affiliation with or endorsement by the FDIC. These representations are false and misleading.”
What the Act Says
The FDIC noted that 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 agency added.
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