Better Market CEO Criticizes Frequent Market Abuses and False Advertising Strategies by Digital Asset Firms as One of the Main Reasons for Federal Deposit Insurance Corporation (FDIC) Rule Change to Protect Investors .
On December 20 Press releaseThe CEO reacted to the FDIC's official statement amending its rules to clamp down on false and misleading insurance claims in the financial markets.
"Official FDIC signs and advertising requirements, false advertising, misrepresentation of policyholder status, and misuse of the FDIC name or logo."
According to him, FDIC deposit insurance is the gold standard that provides confidence to all stakeholders in finance, including ultimate depositors, leading bad actors to falsify or falsely claim to be FDIC insured. .
False advertising policies harm market participants
As some players in the cryptocurrency market make false claims, these claims harm all parties, including investors, insurance plans and the banking system, he added, listing the effect of misleading information on consumers.
โToo many in the cryptocurrency industry want to misleadingly, if not falsely, suggest to cryptocurrency investors that their money is protected by the FDIC. That false comfort not only harms investors, but also the insurance program, insured banks, and the banking system in general, as people lose faith in the FDIC.โ
Furthermore, he noted that the rule change is not limited to the cryptocurrency market, but due to the rampant events, the FDIC has taken action to stop it. Reinforcing his stance, he highlighted the role of FTX US, Gemini Earn and Voyager Digital in misleading users by telling them that deposits were FDIC insured.
This year has seen a massive rise in cryptocurrencies and decentralized finance (DeFi) market regulations, as authorities cite the need to protect investors and prevent asset loss. The collapse of the Terra Network last year and later FTX saw billions wiped The market is pushing regulators to implement new directives and frameworks for the sector.
The new FDIC rules
On December 20, the FDIC adopted a new rule to modify part 328 of its rules on official signs and advertising mentions used by companies.
According to the statement, the rules reflect the certainty and security of the official FDIC signature at a bank's teller windows or through digital channels where depositors conduct banking business.
The rules also clarify regulations on false advertising, deposits on insurance coverage and misuse of the corporation's official sign/logo.
โAdditionally, the final rule modernizes the requirements for the display of the official FDIC sign at bank branches and other physical facilities to take into account evolving designs of bank branches and other physical banking locations where customers make deposits.โ
Currently, financial institutions will differentiate between insured and uninsured deposits, indicating that โโThey are not FDIC insured, are not deposits, and may lose value.โ
