cryptosec.info - RE: Potential Violations of Section 18(a)(4) of the Federal Deposit Insurance Act

Sep 3, 2026

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Letter from the Federal Deposit Insurance Corporation asserting that statements on cryptosec.info contain false and misleading representations about FDIC deposit insurance. The notice cites Section 18(a)(4) of the Federal Deposit Insurance Act and its implementing regulation, explaining that FDIC coverage applies to deposits at insured institutions and does not insure cryptocurrency or exchanges. The FDIC demands immediate removal of misleading claims, a cease-and-desist on similar statements, and written confirmation within 15 business days.

LanguageEnglish

CategoryLetters

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Pages3

Reading Time1 min

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RE: Potential Violations of Section 18(a)(4) of the Federal Deposit Insurance Act

Alleged Misleading Statements on cryptosec.info

Prohibited Conduct Under FDIC Law and Regulations

Required Corrective Actions and Deadlines

Via Electronic Mail to: August 18,2022 Cryptosec.info contact@cryptosec.infocontact@207.246.78.206 # RE:Potential Violations of Section 18(a)(4)of the Federal Deposit Insurance Act To Whom It May Concern, The Federal Deposit Insurance Corporation(FDIC)has reason to believe that statements made on your website,crytosec.info (the Site),contain false and misleading representations,directly or by implication,concerning FDICdeposit insurance,in violation of section 18(a)(4)of the Federal Deposit Insurance Act(FDI Act),12 U.S.C.§1828(a)(4),and its implementing regulation,12 C.F.R.Part 328,Subpart B(Part 328).We hereby demand thatyou cease and desist,and take immediate corrective action to address these false and misleading statements,asmore fully set forth below. Section 18(a)(4)of the FDI Act,12 U.S.C.§1828(a)(4),and Part 328 prohibit any person from using the FDIC'sname orlogo,or similar terms,to represent orimply that an uninsured deposit liability,obligation,certificate,orshare is insured,or from knowingly misrepresenting the extent and manner in which a deposit liability,obligation,certificate or share is insured under the FDI Act.The FDIC has the authority to enforce theseprovisions against any person orentity.Enforcement tools available to the FDIC include the authority to issuecease-and-desist orders and to assess civil money penalties for violations of Section 18(a)(4)and Part 328. Among otherfalse and misleading statements,the Site includes a hyperlink on its landing page entitled,"FDIC-Insured Crypto Exchanges,"which links to a page that claims certain cryptocurrency exchanges are"FDIC-insured”and that this status,"means that the FDIC should protect your funds against losses if it's the case thatthe exchange fails either through fraud,insolvency,bankruptcy,or business mismanagement in general.”Seehttps://cryptosec.info/fdic/.This page prominently displays the FDIC's official seal and includes a list ofcryptocurrency exchanges that it claims are FDIC-insured. These statements appear to contain false and misleading representationsthat uninsured products are insuredby theFDIC,as well asfalse and misleading statements about the extent and manner of protection provided byFDIC deposit insurance and misuse the FDIC's name.These false and misleading statements represent orimplythat:(1)some cryptocurrency exchanges are FDIC-insured;(2)FDIC insuranceis available for cryptocurrency;and(3)FDICinsurance would protect against losses caused by the failure of a cryptocurrency exchange.Areasonable reading of the statements on the Site is that funds deposited on a cryptocurrency exchange that youlist as“FDIC-insured”would be protected or guaranteed against loss forany reason,including a failure of theexchange.In fact,the FDIC does not insure any cryptocurrency exchanges;FDIC insurance does not covercryptocurrency;the FDIC only insures deposits held in insured banks and savings associations(insuredinstitutions);and FDIC insurance only protects against losses caused by the failure of insured institutions.Accordingly,your statements are likely to mislead,and potentially harm consumers. LEGAL DIVISIONFederal Deposit Insurance CorporationFederal Deposit Insurance Corporation Based on the information available to the FDIC,it appears that the statements on the Site regarding depositinsurance violate Section 18(a)(4)of the FDIAct and Part 328.Consequently,the FDIC hereby demands thefollowing corrective action: 1.You shall immediately remove any and all statements,representations,or references that suggest inany way,explicitly orimplicitly,that:(a)any cryptocurrency or cryptocurrency exchanges are FDIC-insured;(b)any funds held in cryptocurrency or other financial products such as stocks,bonds,moneymarket mutual funds,other types of securities or commodities are or can be protected by FDICinsurance;(c)FDIC insurance may provide coverage for any event other than the failure of an insuredinstitution;or(d)FDIC insurance provides

FAQs

What does the FDIC claim about statements on cryptosec.info?

The FDIC claims the website contains false and misleading representations suggesting that cryptocurrency or certain exchanges are FDIC-insured, and that FDIC insurance would protect against exchange failures and other events.

What legal basis does the FDIC cite for the alleged violations?

The letter cites Section 18(a)(4) of the Federal Deposit Insurance Act and its implementing regulation, 12 C.F.R. Part 328, Subpart B (Part 328).

What corrective actions and timeline does the FDIC require?

cryptosec.info must immediately remove misleading statements and cease making similar claims. Written confirmation of full compliance is required within 15 business days, detailing efforts to identify and remove the material.

Sep 3, 2026

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