On July 28, 2022, the FDIC and the Federal Reserve Board issued a joint letter demanding that the crypto brokerage firm Voyager Digital cease and desist from making false and misleading statements concerning the company’s FDIC deposit insurance status and take immediate corrective action to address these false statements. The FDIC is authorized to implement the Federal Deposit Insurance Act which prohibits any person from representing or implying that an uninsured deposit is insured or from knowingly misrepresenting the extent and manner in which a deposit liability, obligation, certificate, or share is insured under the Act.
In their joint letter to the crypto brokerage firm, the agencies stated that some officers and employees of Voyager made false representations online through the firm’s website, mobile app, and social media accounts by publishing or suggesting that:
Voyager itself is FDIC-insured;
Customers who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, held by, on, or with Voyager; and
The FDIC would insure customers against the failure of Voyager itself.
Thus, the agencies are demanding Voyager to:
Immediately remove any and all statements regarding Voyager’s deposit insurance status that are false and misleading from its Voyager’s websites, social media accounts, mobile app, online outlets, and all forms of marketing, advertising, or consumer-facing materials and communications; and
Provide written confirmation to the FDIC and Board of Governors that it has fully complied with the cease and desist order.
Following this cease and desist order, the FDIC issued an Advisory to FDIC- insured institutions regarding deposit insurance and dealing with crypto companies on July 29, 2022, which we wrote about in this article: FDIC’s Advisory to Institutions on Deposit Insurance and Crypto Companies.
Read the FDIC’s press release here.
The joint letter can be found here.