The Federal Deposit Insurance Corp. on Monday ordered Utoppia, a neobank that offers crypto wallets, to stop making “false and misleading statements” about deposit insurance.
As recently as Jan. 5, the fintech’s website claimed Utoppia was “insured by the FDIC,” according to the regulator.
And as recently as Feb. 12, the neobank said on social media in Spanish that it is backed or protected by the FDIC, the agency said.
“Utoppia is not FDIC-insured, and the FDIC does not insure crypto assets,” the FDIC said in a statement. “By not distinguishing between US-dollar deposits and crypto assets, the statements imply FDIC insurance coverage applies to all customer funds (including crypto assets).”
Fine print on the bottom of Utoppia’s website says its cash management services are provided by Synapse Brokerage LLC, which allows customers to sweep uninvested cash balances into certain FDIC-insured bank accounts at Synapse program banks.
Banking services for the Utoppia’s U.S. dollar account are provided by FDIC-insured Lineage Bank, according to the fintech.
The neobank’s disclosures, however, “are not clear and conspicuous and are not in close proximity to the relevant representations about FDIC insurance, which further implies that Utoppia is FDIC-insured,” the FDIC said.
“Whenever anyone other than an insured depository institution states that a product is insured by the FDIC, that person must identify the insured depository institution(s) where the funds will be placed,”...
The Department of the Attorney General says the man claiming to be the state’s chief technology officer at national conferences and on online platforms is not affiliated with the state of Hawaii a...