The U.S. Federal Deposit Insurance Corporation (FDIC) has updated its regulations regarding the use of its official signage and advertising, a decision that could influence public perception of certain cryptocurrency firms.
On December 20, the FDIC announced that its board of directors had completed a rule update addressing concerns over “false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name or logo.” The new rule mandates FDIC-insured institutions to display a black and navy blue sign on their websites, apps, physical locations, and specific ATMs from 2025, replacing the gold and black sign used since the 1930s.
The FDIC acknowledged that its last substantial revision of sign and advertising regulations occurred in 2006. This revision intends to combat misleading claims by entities about FDIC insurance coverage.
Dennis Kelleher, President and CEO of Better Markets, noted that while the rule isn’t exclusively targeting the crypto industry, crypto-related abuses have been widespread. He cited examples where crypto firms like Gemini Earn, FTX US, and Voyager Digital misled investors into believing their investments were FDIC insured, applauding the FDIC’s efforts to update and reinforce the rules against such misconduct.
In 2023, several banks associated with crypto firms faced collapses, regulatory shutdowns, or voluntary liquidations, raising legislative concerns about safeguarding user funds. The FDIC intervened in cases like the closure of Signature Bank and the collapse of Silicon Valley Bank, which held deposits from Circle and Sequoia Capital, covered under FDIC insurance up to $250,000 per depositor.
Furthermore, the Consumer Financial Protection Bureau cautioned in June that payment apps supporting crypto transactions might not be FDIC-insured, posing a risk to funds. The FDIC has also labeled crypto activities as “novel and complex risks” for U.S. banks due to their uncertain legal and regulatory status.