McGlinchey Stafford, PLLC
MONTH-IN-BRIEF (Feb 2023)
Banking Law
FDIC Issues Another Round of Cease and Desist Letters Focused on Deposit Insurance Claims
By Susan Seaman & Daniel Wilkinson, Husch Blackwell LLP
On February 15, 2023, the Federal Deposit Insurance Corporation (“FDIC”) issued cease and desist letters demanding that a cryptocurrency exchange, crypto review websites, and a fintech offering high-yield deposit accounts stop making false and misleading statements regarding deposit insurance coverage.
In its letter to the cryptocurrency exchange, the FDIC highlighted the following problematic statement on the exchange’s website: “U.S. dollars held in your [exchange] fiat currency wallet are FDIC-insured up to $250,000 per account.” According to the FDIC, this statement is false or misleading in violation of the Federal Deposit Insurance Act (“FDI Act”) because cryptocurrency exchanges are not insured by the FDIC. The two crypto review websites received cease and desist letters for repeating substantially the same deposit insurance claim in articles reviewing the exchange.