A non-bank company that reportedly claims relationships with two insured depository institutions (IDIs) and asserts the availability of “FDIC-insured” crypto accounts was told Friday that it and certain of its officers must “cease and desist from making false and misleading statements about FDIC deposit insurance and to immediately correct these statements.”
In its letter Friday to Unbanked Inc. of Alpharetta, Ga., the Federal Deposit Insurance Corp. (FDIC) pointed to evidence that Unbanked “made false representations on its website, in promotional materials, and on social media platforms stating or suggesting its crypto-related products and services are FDIC-insured. These representations included claims that Unbanked offered FDIC-insured ‘crypto accounts,’ without any disclaimer that cryptocurrency is not FDIC-insured or guaranteed.”
The agency points out that the FDIC “only insures deposits held in FDIC-insured financial institutions and only protects against losses caused by the failure of an FDIC-insured financial institution.”
The letter points to several statements by Unbanked on social media, in advertisements and at least one promoted article that contain “apparent misrepresentations” about FDIC insurance. Among those noted in the letter were a tweet that the firm offers “FDIC-insured #crypto bank accounts” and FDIC-insured “crypto accounts”; and advertising on its website of the availability of FDIC insurance regarding checking accounts and the ability to “deposit, withdraw, and seamlessly trade between a number of crypto assets” without a disclaimer that the crypto assets are not FDIC-insured or guaranteed.
The agency also said some of Unbanked’s representations regarding the availability of FDIC insurance appear to fail to identify the IDI(s) into which consumers’ deposit may be placed.
The FDIC demanded that Unbanked take specific corrective actions and, within 15 days, to confirm that it has complied and to detail all efforts to do so.