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Cryptocurrencies are experiencing one of the best times in terms of their popularity and adoption among individuals and institutions. Marketing and advertisements play an important role to make this possible. However this creates possibilities of false marketing by some companies that end up harming the users. Authorities ensure to mitigate the potential risks by taking crucial measures.
Now one of the federal agencies in American depository institutions, the Federal Deposit Insurance Corporation (FDIC) reported to take actions against misleading marketing. For this, the agency sent a cautionary letter to at least five different crypto companies. These companies include FTX.US, Cryptonews.com, Cryptosec.info, SmartAsset.com, FDICCrypto.com. FDIC subjected these firms for making misleading statements regarding the deposit insurance.
FDIC noted in a press release that it had asked the offices, directors, executives and employees of these five companies to stop creating false claims about the deposit insurance and also asked to take immediate disciplinary actions.
The press release further added that FDIC collected the evidence and these companies have made unreal representations. This includes illustrating these advertisements on their official websites and accounts on different social media platforms. The companies are accused of claiming that their crypto products or the stocks are insured by FDIC.
In one case, FDIC said, the company had suggested their endorsement and affiliation from the agency itself, as the company’s name indicated. The agency added that the Federal Deposit Insurance Act or FDI Act ensures no company could use FDIC in their name, advertising or marketing. This could imply direct relation between the agency and the company.
The US subsidiary of the famous Bahamian crypto exchange FTX, FTX.US received a letter from FDIC. The agency alleged that FTX.US boasts itself as a crypto exchange certified by FDIC.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
