FDIC Issues Cease and Desist Letters to Companies for Crypto-Related Representations About Deposit Insurance
August 29, 2022
The last few weeks have seen a significant ramp-up of federal bank regulators’ focus on cryptocurrency companies and their disclosures regarding FDIC deposit insurance, signaling a potential spike in enforcement actions targeted at the crypto sector.
On August 19, 2022, the Federal Deposit Insurance Corporation issued cease and desist letters to five companies, claiming the companies had made false and misleading statements concerning FDIC deposit insurance in violation of the Federal Deposit Insurance Act. The Letters follow a joint letter by the FDIC and Federal Reserve Board demanding that Voyager Digital cease and desist from making false or misleading statements regarding its FDIC deposit insurance status and immediately correct prior disclosures. The FDIC also recently released a fact sheet clarifying certain misconceptions about deposit insurance in relation to cryptocurrency companies.
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