The Federal Deposit Insurance Corp. (FDIC) has taken action against Alpharetta-based cryptocurrency nonbank, Unbanked, Inc., for making misleading statements regarding FDIC deposit insurance coverage. In a cease-and-desist order issued on Friday, the FDIC accused Unbanked of providing incorrect information and deceptive promotions related to its crypto products.
The FDIC pointed out that Unbanked’s promotional materials on its website and social media falsely suggested that their crypto-related products were protected under FDIC insurance. This insinuation led potential investors to believe that they would be safeguarded against losses, which the FDIC does not cover for digital assets.
While acknowledging Unbanked’s partner-banking relationships with two FDIC-insured banks, the FDIC emphasized that this association does not imply any insurance coverage for cryptocurrency investments.
Today, we demanded that Unbanked, Inc. of Alpharetta, Georgia cease and desist from making false and misleading statements about FDIC deposit insurance and to immediately correct these statements.https://t.co/1pli40LzU0 pic.twitter.com/ME8ybUG7Y7
— FDIC (@FDICgov) August 4, 2023
The agency clarified that its insurance solely applies to deposits held in FDIC-insured financial institutions and only protects against losses stemming from the failure of such institutions.
In a press release, the FDIC explicitly stated, “FDIC insurance does not cover cryptocurrency or digital assets.” This enforcement action seeks to address the misleading information and protect consumers from potential financial risks associated with cryptocurrency investments.
