The Federal Deposit Insurance Corporation (FDIC) has slammed served five companies dealing in digital assets with cease and desist orders. According to the statement from the regulatory agency, the said companies were making untrue statements about insurance on digital assets. The company released the statement on Friday, addressing it to the companies in question, including heavyweight FTX US. Other companies mentioned in the statement include Cryptonews, SmartAssets, and others.
The agency said the companies lied to investors
According to the FDIC’s statement, the companies above lied to investors about some crypto-related investments that they insure. The agency mentioned that the information given to the public about the products is false. It also mentioned that the agency did not insure the said products.
The FDIC also reiterated that they do not insure stocks currently in brokerage firms’ accounts. In the letter, the agency warned the companies about this misleading information and urged them to do right by their users. It also warned the said companies to correct the narratives and remove the false and untrue statements about the products they insure on their websites, blogs, and social accounts.
FDIC shows a hard stance towards crypto companies
The FDIC has always sounded notes of warnings to companies in the crypto market about their lack of insurance over the last few years. Some months ago, the agency warned several banks across the country about assessing and mitigating risks when entering into business with crypto firms. This is because most of the firms have no insurance covering them. In order to bolster that point, the agency mentioned that while banks have cover in terms of insurance for about $250,000 deposits, digital asset exchange has none.
There have also been claims that the agency has been against crypto in the last few years after various posts have been targeted at discouraging banks from forming work relationships with several digital exchanges. Some months ago, a senator sent a letter to the FDIC to explain some claims made by a whistleblower in that regard. In the said letter, the Senator inquired about why the agency has been against banks entering into working relationships and partnerships with legal digital exchanges. He noted that the whistleblower claims that the body is taking any means necessary to ensure such relations never come to fruition.