Key Takeaways
- The FDIC accuses Unbanked of falsely implying that financial products, including crypto, are insured by the agency and has made it clear that it will pursue companies making such claims.
- The agency provided a 15-day deadline for Unbanked to confirm in writing that it has complied with the order and cease making misleading statements in the future.
On Friday, the U.S. Federal Deposit Insurance Corporation (FDIC) took action against crypto fintech firm Unbanked, Inc., issuing a cease and desist notice in response to alleged false and misleading claims regarding its insurance status. The FDIC accuses Unbanked of falsely implying that financial products, including cryptocurrencies, are insured by the agency and has made it clear that it will pursue companies making such claims.
The FDIC cited various social media posts made by Unbanked that suggested FDIC insurance coverage for financial products offered by the firm. Additionally, the agency highlighted that Unbanked had advertised FDIC insurance availability on its website in connection with checking accounts and crypto asset trading without a disclaimer clarifying that cryptocurrencies are not FDIC insured or guaranteed.
In light of these concerns, the FDIC demanded that Unbanked, Inc. promptly remove any statements implying FDIC insurance protection for funds held in cryptocurrencies or other uninsured financial products. The agency provided a 15-day deadline for Unbanked to confirm in writing that it has complied with the order and cease making such misleading statements in the future.
Unbanked has been facing challenges recently, with the company announcing in June its decision to wind down its operations. The co-founders cited a lack of an expected $5 million funding influx due to the adverse U.S. regulatory environment, which hampered the firm’s ability to raise capital and sustain a viable business.
The FDIC’s recent enforcement action against the Unbanked comes as part of its intensified scrutiny of crypto firms. The agency’s increased regulatory oversight indicates a proactive approach to address potential inaccuracies in claims made by cryptocurrency operations. Failure to rectify these inaccuracies promptly could result in further enforcement actions from the FDIC.
This move follows a similar allegation made in June when the FDIC accused prominent crypto exchange OKCoin of making false representations implying FDIC insurance coverage for certain crypto-related products.
