FDIC Demands Three Companies Cease Making False or Misleading Representations about
Deposit Insurance
WASHINGTON — The Federal Deposit Insurance Corporation (FDIC) issued letters demanding three companies and certain associated parties cease and desist from making false and misleading statements about FDIC deposit insurance. The FDIC is demanding that PrizePool, Inc. (PrizePool), AmeriStar, LLC (AmeriStar), and HighLine Gold, LLC (HighLine Gold) take immediate corrective action to address these false or misleading statements. In the case of AmeriStar and HighLine Gold, the FDIC has reason to believe these companies are related entities sharing several of the same principals and the same physical address, and therefore, issued a joint letter to them.
Based upon evidence collected by the FDIC, these companies and certain associated parties made false representations by: (1) stating or suggesting they are FDIC-insured or that certain uninsured financial products are insured by the FDIC; (2) misusing the FDIC name or logo; (3) misrepresenting the nature or extent of deposit insurance; and/or (4) failing to clearly identify the insured depository institutions with which they have a relationship for the placement of customer deposits and into which funds may be deposited. The evidence suggests these misrepresentations are causing harm, or have the potential to cause harm, to consumers.
“The Federal Deposit Insurance Act prohibits any person from engaging in false advertising by misusing the name or logo of the FDIC or from making knowing misrepresentations about the existence of or the extent or manner of deposit insurance,” said FDIC Chairman Martin J. Gruenberg. “Combatting misrepresentations about deposit insurance coverage goes to the heart of the FDIC’s mission of maintaining stability and public confidence in the nation’s banking system”
The FDI Act prohibits any person from representing or implying that an uninsured financial product is FDIC–insured or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act further prohibits companies from implying that they are FDIC-insured or that their products are FDIC–insured by using “FDIC” in the company’s name, advertisements, or other documents. The FDIC is authorized by the FDI Act to enforce this prohibition against any person.
On December 20, 2023, the FDIC Board of Directors adopted a final rule to amend part 328 of its regulations, which updates the FDIC’s regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name and logo. For example, the final rule clarifies that FDIC–associated terms or images may not be used in marketing and advertising materials to inaccurately imply or represent that any uninsured financial product or non–bank entity is insured or guaranteed by the FDIC.
FDIC deposit insurance protects customers in the unlikely event of the failure of an insured depository institution. To determine if an institution is FDIC–insured, you can ask a representative of the institution, look for the FDIC sign at the institution, or use the FDIC’s BankFind tool. For general information about FDIC deposit insurance, read the following frequently asked questions. For more information about FDIC insurance and digital asset companies, read the following fact sheet.
ATTACHMENTS:
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MEDIA CONTACT:
Brian Sullivan
202-412-1436
PR-16-2024
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