Alleged “false and misleading” statements about federal bank deposit insurance coverage have earned five entities demand letters from the federal insurance agency that they stop and take “immediate action” to address the alleged “misstatements,” the agency said Friday in a release.
The Federal Deposit Insurance Corp. (FDIC) said the letters were sent to Atmos Financial, PBC (Atmos); BybitcoinEx, Inc. (BybitcoinEx); ORGANO Payments, Inc. and its subsidiary OGPay (OGPay); Horizon Globex GmbH (Horizon), which operates Upstream Exchange; and Zil Money Corporation (Zil).
The FDIC said the letters demand that the entities “take immediate corrective action to address these false or misleading statements.”
The agency said it has gathered evidence that the five companies (and associated parties) allegedly made false representations. Those include: stating or suggesting that these entities are FDIC-insured or that certain uninsured financial products are insured by the FDIC; misusing the FDIC name or logo; misrepresenting the nature or extent of deposit insurance; and/or failing to clearly identify the insured depository institutions with which they have a relationship for the placement of customer deposits and into which funds may be deposited.
“These material misrepresentations and omissions are false and misleading, and have the potential to harm consumers,” the FDIC asserted in its release.
The agency noted that just last month, its board adopted a final rule (published Thursday in the Federal Register) that updated its regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name and logo.
“For example, the final rule clarifies that FDIC–associated terms or images may not be used in marketing and advertising materials to inaccurately imply or represent that any uninsured financial product or non–bank entity is insured or guaranteed by the FDIC,” the agency stated.