FDIC tells CEX.IO to redact insurance promises
Cryptocurrency alternate CEX.IO has acquired a cease-and-desist order from the FDIC, as seen in a letter revealed by the U.S. regulator on Feb. 15.
The Federal Deposit Insurance coverage Company’s authorized division mentioned that CEX.IO has made false or deceptive statements suggesting that the FDIC insures it.
CEX.IO’s official web site claims that “U.S. {dollars} held in your CEX.IO fiat foreign money pockets are FDIC-insured as much as $250,000 per account” with out qualification.
The FDIC, nevertheless, says that CEX.IO is itself not insured. It known as the above assertion deceptive as a result of it doesn’t establish any insured deposit establishments (IDIs) with which CEX.IO has a direct or oblique relationship. Although CEX.IO might deposit funds with such an establishment, its customers’ holdings are usually not essentially insured in that approach. As such, the FDIC has demanded that CEX.IO take away all statements to that impact.
The regulator additionally directed two impartial web sites — Captain Altcoin and Bankless Instances — to appropriate statements suggesting CEX.IO is FDIC-insured.
The FDIC additionally mentioned that a kind of claims incorrectly implies that crypto belongings might be federally insured. This criticism doesn’t appear to use to CEX.IO’s personal web site, which has said since at least 2021 that federal insurance coverage doesn’t apply to digital belongings.
CEX.IO is a comparatively minor alternate, with a 24-hour quantity of simply $4.3 million.
The FDIC has despatched related notices to different crypto corporations. Final 12 months, it despatched stop and desist letters to FTX.US and Voyager Digital over their insurance coverage ensures.
