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FDIC tells three companies to stop claims about deposit insurance

Bank Regulatory Federal Issues Deposit Insurance Federal Deposit Insurance Act

On June 15, the FDIC sent letters ordering three companies and certain of their officers to cease and desist from using the agency’s logo and making false and misleading statements about FDIC deposit insurance. The companies are required to take immediate corrective action to address the allegedly misleading statements. The FDIC maintained that the banks and/or its officers made false and misleading statements in English and Spanish suggesting that they are FDIC-insured. For one of the companies, the FDIC alleged that the company stated that insurance would protect customers’ cryptocurrency assets; that it had and that the company claimed a partner relationship with an FDIC-insured bank without identifying the insured institution in its consumer-facing materials; and that its false FDIC insurance claims were made through social media posts by the company and its chief marketing officer. Under the Federal Deposit Insurance Act, the announcement added, persons are prohibited “from representing or implying that an uninsured product is FDIC-insured or from knowingly misrepresenting the extent and manner of deposit insurance.” The FDIC requested a response within 15 days for two of the companies and 5 days for one.