The FDIC released an Advisory to FDIC-Insured Institutions Regarding FDIC Deposit Insurance and Dealings with Crypto Companies to address (1) concerns about the risks of consumer confusion or harm arising from crypto assets offered by insured banks and (2) inaccurate representations about deposit insurance by non-banks. The FDIC also released a Fact Sheet about what the public needs to know about FDIC deposit insurance and crypto companies.
Both the Advisory and Fact Sheet stress the importance of insured banks’ need to reduce their risk by understanding when FDIC deposit insurance applies and what products are FDIC insured and understanding their third-party relationships such as with crypto companies. To avoid customer confusion and misrepresentation, insured banks’ relationships with these companies should be closely monitored, including ensuring that these companies are not making any misrepresentations and that their communications are clear and conspicuous, and insured banks should be reviewing the company’s marketing material and disclosures.
To read the Advisory, please click here.
To read the Fact Sheet, please click here.