• CEX.IO, a cryptocurrency exchange, has received a letter from the US Federal Deposit Insurance Corporation (FDIC).
• The FDIC has given the exchange 15 days to make the necessary adjustments, or they may face cease-and-desist orders and fines.
• The FDIC requested CEX.IO to explain any representation regarding insurance coverage and delete any comments that indicate it has FDIC protection.
CEX.IO Receives Notice by FDIC Over Insurance Claims
Cryptocurrency exchange CEX.IO has received a letter from the United States Federal Deposit Insurance Corporation (FDIC). Notifying them that they may have broken federal law by making false and misleading claims regarding the exchange’s insurance status. The regulatory body has given the exchange 15 days to make the necessary adjustments.
Enforcement Measures Expected
The FDIC requested that CEX.IO explain any representations referring to “pass-through insurance arising from the placement of funds in accounts at IDIs,” as well as delete any comments that indicate it has FDIC protection. The agency which was established by Congress and is funded by insurance premiums, indicated it may issue cease-and-desist orders and levy civil monetary fines as enforcement measures if needed. Two websites also claimed that CEX.IO was insured by FDIC; letters were sent to those sites requesting revisions on their assertions as well.
Elizabeth Warren, a crypto sceptic praised the FDIC’s stance on not insuring cryptocurrencies while three organizations issued a statement warning financial institutions about risks associated with cryptocurrency recently as well.
Celsius Network Bankruptcy Case
Celsius Network had picked NovaWulf offer to escape bankruptcy after its liquidity crisis due to lack of sufficient funds for withdrawals of its customers’ deposits held in their platform wallets recently too .
In conclusion, CEX IO is facing severe consequences over false and misleading claims regarding its insurance status according to US laws enforced by Federal Deposit Insurance Corporation (FDIC). The agency could issue cease-and-desist orders and levy civil monetary fines if necessary while other organizations are issuing warnings about risks associated with cryptocurrencies nowadays as well.