FDIC Demands Unbanked, Inc. Cease Making False or Misleading Representations about Deposit Insurance

August 6, 2023 / Source: FDIC

WASHINGTON — The Federal Deposit Insurance Corporation (FDIC) today demanded Unbanked, Inc. (Unbanked) of Alpharetta, Georgia, as well as certain of the company’s officers, cease and desist from making false and misleading statements about FDIC deposit insurance and to immediately correct these statements.

Unbanked is a non-bank company that has represented banking relationships with two FDIC-insured banks. Based upon evidence collected by the FDIC, Unbanked made false representations on its website, in promotional materials, and on social media platforms stating or suggesting its crypto-related products and services are FDIC-insured.  These representations included claims that Unbanked offered FDIC-insured “crypto accounts,” without any disclaimer that cryptocurrency is not FDIC-insured or guaranteed.

Unbanked’s statements appear represent or imply that: (1) FDIC insurance is available for cryptocurrency, and (2) FDIC insurance would protect against cryptocurrency-related losses. In fact, FDIC insurance does not cover cryptocurrency or digital assets. In addition, the FDIC only insures deposits held in FDIC-insured financial institutions 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 or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act further prohibits companies from implying that their products are FDIC–insured by using “FDIC” in the company’s name, advertisements, or other documents.

FDIC: PR-60-2023