The Federal Deposit Insurance Corp. (FDIC) recently announced that it has issued cease and desist letters to five crypto news websites to warn them to stop slandering about the FDIC deposit insurance and take corrective actions.
Said websites include Cryptonews.com, Cryptoytosec.info, SmartAsset.com, FTX.US, and FDICCrypto.com.
Customers are protected by FDIC deposit insurance in a rare event that an FDIC-insured bank failed.
According to the cease and desist letters, the FDIC requested that the companies, their officers, and employees refrain from mentioning any FDIC deposit insurances at specific exchanges or their own platforms, and mandated the firms to take immediate actions to retract all the incorrect and misleading statements that were made earlier.
The letter seemingly notes that FDIC claims each firm has misrepresented the holdings’ depository insurance status or other false information about deposit insurance coverage.
According to the FDIC’s letter’s evidence presented, each of the firms allegedly made misleading claims that specific crypto-related items or equities held in brokerage accounts are FDIC-insured, including those on their websites and social media accounts.
FDIC’s letter to FTX.US quoted President Brett Harrison’s tweet on July 20 that “stocks are held in FDIC-insured and SIPC-insured brokerage accounts” and “employers’ direct deposits are stored individually FDIC-insured bank accounts in the users’ names.”
The regulator claimed that FTX US is not FDIC-insured, and FDIC does not insure any brokerage accounts, and stocks or cryptocurrency are not under the coverage of FDIC insurance.
According to the letter to Cryptonews.com, the regulator cited five of many instances it claimed the website had mischaracterized or misrepresented the FDIC-insured claims in their evaluation of crypto exchanges.
The FDIC has especially targeted Cryptosec.info for allegedly using the FDIC’s official seal on its website, along with the inclusion of a list of “FDIC-insured Crypto Exchanges.”
SmartAsset.com has also reportedly contributed to this list of supposedly FDIC-insured crypto exchanges — which has been requested by the regulator to be removed.
The agency’s name was reportedly used by FDICCrypto.com in its registered domain name, according to the regulator. FDIC asserted that this is implied to be the agency’s affiliation or endorsement, and orders the firm to stop using the domain name or any related domain names at once.
The regulator required all offending firms to remove the infringement examples from their respective spaces, run a cleanup of any other false statements, and submit a 15-day compliance report.
