FDIC sends 5 companies, including FTX.US, cease and desist letters for making false statements about deposit insurance

The Federal Deposit Insurance Corp. (FDIC) said Aug. 19 that it has issued letters demanding Cryptonews.com, Cryptoytosec.info, SmartAsset.com, FTX.US and FDICCrypto.com to stop making misleading statements about FDIC deposit insurance and implement corrective measures. 

FDIC deposit insurance protects customers in the unlikely event of the failure of an FDIC-insured bank.  

In the cease and desist letters sent Aug. 18, the FDIC demanded that the companies, their officers and employees abstain from alluding to any presence of FDIC deposit insurance at certain exchanges or their own platforms. It also demanded that the companies take immediate measures to correct any false and misleading statements made previously. 

The FDIC alleges in the text of the letters that each entity has purportedly misrepresented the depository insurance status of holdings or furthered falsehoods concerning the coverage of deposit insurance. 

Based on the evidence presented by the FDIC in the letter, each of the companies allegedly 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. 

More details to follow…

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