Five crypto firms ordered to stop false FDIC claims

Five crypto companies were warned to stop making false claims about deposit insurance coverage by the U.S. Federal Deposit Insurance Corp. (FDIC).

The FDIC sent “cease and desist” letters to five firms — Cryptonews.com, Cryptosec.info, SmartAsset.com, FTX US and FDICCrypto.com — and their officers, directors and employees.

“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 a release.

U.S. federal deposit insurance legislation prohibits claims that uninsured products are FDIC-insured, and misrepresenting deposit insurance coverage.

It also prohibits companies from implying that their products are insured by using “FDIC” in the company’s name, ads or other documents.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.