The FDIC is cracking down on Unbanked, Inc., a non-bank company based in Alpharetta, Georgia, for making false and misleading statements about FDIC deposit insurance.
According to the FDIC, Unbanked has been representing that it has banking relationships with two FDIC-insured banks, and has used this to make false claims that its crypto-related products and services are FDIC-insured.
The company’s statements, which include claims that it offers FDIC-insured “crypto accounts” without any disclaimer that cryptocurrency is not FDIC-insured or guaranteed, appear to represent or imply that FDIC insurance is available for cryptocurrency, and that it would protect against cryptocurrency-related losses.
However, the FDIC makes it clear that FDIC insurance does not cover cryptocurrency or digital assets, and only protects against losses caused by the failure of an FDIC-insured financial institution.
The Federal Deposit Insurance Act (FDI Act) prohibits any person from representing or implying that an uninsured product is FDIC-insured, and prohibits companies from knowingly misrepresenting the extent and manner of deposit insurance.
The FDIC has demanded that Unbanked, Inc. cease and desist from making these false and misleading statements, and to immediately correct them.
The FDIC’s action against Unbanked, Inc. is a significant development in the ongoing effort to protect consumers from false and misleading financial claims.
The FDIC has also taken the opportunity to remind the public that FDIC insurance only applies to deposits held in FDIC-insured financial institutions, and only protects against losses caused by the failure of an FDIC-insured financial institution.
Consumers should be aware that cryptocurrency is not FDIC-insured, and that any claims that it is should be treated with skepticism.
The FDIC’s move against Unbanked, Inc. is a clear warning to other companies that may be engaging in similar practices.
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system. The FDIC insures deposits at banks and thrifts in the United States and oversees and regulates various financial institutions to ensure their safety and soundness.
Related Federal Cases
- Unbanked, Inc. Ordered to Halt Crypto Scam, Washington D.C., 2023 · Georgia
- SouthernCare Inc, Hospice Fraudulent Claims, Birmingham AL, 2023 · Florida
- Marlene Barkheimer, FDIC Advisory Committee Appointment, Washington… · Georgia
- Troy Campbell Named to FDIC Advisory Committee, Altoona PA, 2023 · Georgia
- Letitia James Demands Senate KOSA, New York NY, 2024 · Georgia
Key Facts
- Agency: FDIC
- Category: Fraud & Financial Crimes
- Source: Official Source â†â€â€ÂÂÂ
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