Federal Deposit Insurance Corporation acting president Martin Gruenberg said the agency does not endorse any cryptocurrency companies in the United States, nor does its insurance cover losses from digital tokens.
At a Nov. 15 Senate Banking Committee hearing on oversight of financial regulators, New Jersey Sen. Bob Menendez said lawmakers needed to “take a serious look at cryptocurrency exchanges and lending platforms.” for his risky behavior. Gruenberg responded to Menendez’s questions by confirming that there was “no FDIC-backed cryptocurrency company” and that “Cryptocurrency of any kind is not covered by FDIC insurance.”
FDIC insurance typically protects deposits held by financial institutions in the United States in the event of bank failure or other special circumstances. Menendez cited the FDIC’s August issuance of cease and desist letters to companies for allegedly making false representations about deposit insurance related to digital assets and questioned how the agency, under Gruenberg, would address risks to cryptocurrency companies.
“This has been a key priority for us,” Gruenberg said. “When we identified some companies in the cryptocurrency space and others engaging in misrepresentation, we acted very forcefully, sending out letters demanding that they cease and desist and stating that if they did not comply, we have enforcement authorities available under the law that we can bring down. “.
Gruenberg has been acting chair of the FDIC since February, following the resignation of the previous chair, Jelena McWilliams. On November 14, United States President Joe Biden announced that he would appoint Gruenberg to a five-year term as the next FDIC Chairman. The acting president will also testify before the House Committee on Financial Services on November 16.
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