First FDIC Rule Update Since 2006

Crypto News – In a move that might impact how the public views particular cryptocurrency companies, the Federal Deposit Insurance Corporation (FDIC) of the United States established a rule restricting the use of its official signs and advertising.

First FDIC Rule Update Since 2006

The FDIC claimed in an announcement on December 20 that rules pertaining to “false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC‘s name or logo” had been finalized by its board of directors. Starting in 2025, institutions covered by the FDIC will have to display a black and navy blue sign on all websites and applications, brick-and-mortar bank facilities, and some ATMs instead of the gold and black sign that was first adopted in the 1930s.

It was not until 2006 that the FDIC stated that significant updates to its regulations regarding signs and advertising had occurred. As explained by the state-owned enterprise, the updated legislation aimed to address the possibility of companies misleading customers into thinking their funds were insured by the FDIC.

2023 was a Year of bankruptcy for Many Large Banks in General

Legislators began debating how to protect user assets in 2023 after a number of banks connected to cryptocurrency companies failed, were shut down by the government, or closed voluntarily. The FDIC and the Department of Financial Services of New York State collaborated to shut down Signature Bank.

Venture capital firm Sequoia Capital and stablecoin issuer Circle had money held by Silicon Valley Bank, which was insured by the FDIC, until it collapsed in March. Up to $250,000 is insured per depositor by the FDIC in most cases.

While the rule finalized today isn’t limited to the crypto industry, abuse by crypto has been rampant, forcing the FDIC to take multiple actions to stop it. Investors were misled by Gemini Earn, FTX US, Voyager Digital, and other crypto firms into believing their investments were FDIC insured. We applaud the FDIC’s action to update and strengthen the rules to address this misconduct.

Dennis Kelleher, president and CEO and the nonprofit organization Better Markets