US Banking Regulator: Banks Must Reiterate Risks Attached To Crypto

Source: In Bitcoin We Trust

As the crypto market continues to bleed, the US banking regulator, Federal Deposit Insurance Corporation (FDIC) appealed to financial institutions engaging in crypto services to declare the risk index for unregulated assets. This Friday, the FDIC sought banks to reiterate to its customers that the digital assets sector is not regulated by the government, which further makes it prone to collapse.

Followed by the ongoing crypto crisis where eminent industry players, from three arrow capital (3AC) to Celsius, all fell prey to the market turmoil, the regulatory authorities are taking prominent steps to ensure the volatile status of the digital assets’ market is made clear to investors. In the latest advisory meeting, the FDIC noted the need for banks to clarify risks attached to services offered by non-bank entities such as crypto deposit insurance.

“Inaccurate representations about deposit insurance by non-banks, including crypto companies, may confuse the non-banks’ customers and cause those customers to mistakenly believe they are protected against any type of loss,” the FDIC advisory stated.

US Authorities Extend Crypto Criticism To Apple And Google

Along with criticizing the volatile nature of crypto investments, US authorities have also highlighted the heightened rate of scams in the sphere. Followed by the FBI’s latest report regarding investors losing nearly $43 million to fraudulent cryptocurrency investment applications, US Senator Sherrod Brown (D-Ohio) sought explanations from Apple and Google regarding their vetting process for crypto investment apps.

According to CoinDesk, Senator Brown wrote letters to the two companies chief executives stating that “cyber criminals have stolen company logos, names and other identifying information of crypto firms and then created fake mobile apps to trick unsuspecting investors into believing they are conducting business with a legitimate crypto firm”. He added that this has resulted in alarming consequences with far too many investors falling victim to such frauds.