FDIC alleges five crypto companies misled on deposit insurance

The FDIC today sent cease-and-desist letters to five companies that the agency alleges misled consumers into believing that cryptocurrency assets are covered by FDIC deposit insurance. The agency ordered the companies and their employees to stop making false claims about deposit insurance “and take immediate corrective action to address these false or misleading statements,” according to a statement.

The letters to Crypto News, CryptoSec, SmartAsset, FTX US and FDICCrypto.com cite examples of statements or suggestions by the companies “that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured.” The agency singled out FDICCrypto.com for a web address “that suggests affiliation with or endorsement by the FDIC.” The cease-and-desist letters came roughly three weeks after FDIC issued an advisory to banks regarding what it says were misrepresentations by some cryptocurrency companies that their products are eligible for deposit insurance coverage.