Federal insurance authority raps crypto firms for false representations

Five cryptocurrency companies have been sent cease and desist letters from the US Federal Deposit Insurance Corp (FDIC) for claiming their products fall its deposit insurance.

FDIC is an independent agency created by Congress to maintain stability and public confidence in the US financial system.

Cryptonews.com, Cryptosec.info, SmartAsset.com, FTX US and FDICCrypto.com all received the letters, with FTX US raising eyebrows as a relatively large player among smaller, less well-known companies.

The agency said there was credible evidence that the companies had made false representations and claims that certain cryptocurrency products are covered by FDIC mandates for asset insurance.

The letters prohibit these companies from making such claims on their websites or through social media.

The federal authority said in a statement. “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.”

Presently, no cryptocurrency assets are covered under federal insurance. These mechanisms are usually reserved for retail and other investors who own FIAT money and asset which suffer market crash across the board.

The companies must not claim that any of their products are insured by associating them with FDIC’s name in documents, advertisement or any other way.

The FDIC has sent the letter to all employees of the targeted companies as well as their executives.

We recommend using your cryptocurrency holdings for leisure. Try the casino games at 1xBit, FortuneJack or Bitcasino and have a blast.

Source

Updated: 08/22/2022 — 18:00