FDIC, the American deposit car insurance company, has written to executives of the digital currency exchange CEX.IO to warn them that they may have violated federal law about misrepresentation and misleading statements about the exchange's commercial insurance status. The agency gave the exchange 15 days to make changes.

The problem statement can also be found in the small font details of the Exchange State Coin Transporter license information. The message in Rhode Island reads: "your CEX.IO law stipulates that the dollars held in your currency wallet are insured by FDIC Commercial Insurance, up to a maximum of $250000 per account."

FDIC's letter also mentioned that if the exchange has an FDIC-insured account, be sure to list the names of institutions with insured deposits with funds. The letter, signed by Seth Rosebrock, general counsel, assistant to FDIC, cites the federal deposit insurance law in its entirety. This letter clarifies:

CEX is not insured by FDIC, and FDIC commercial insurance does not protect everything except digital currency or US dollar deposits held by IDI [insured Deposit institutions].

FDIC requires CEX.IO to delete the statement implying that it has FDIC insurance, terminates and stops issuing all similar statements, and responds to all statements related to "direct commercial insurance formed by depositing funds into an IDI account".

The agency is a separate agency established through the U.S. House of Representatives and its assets are derived from insurance fees. The agency indicates that if the enforcement actions it takes include the publication of termination orders and the assessment of civil penalties.

FDIC also found two sites for posts to CEX.IO, claiming that the exchange had FDIC commercial insurance. It also sent out letters requiring similar changes to such statements. One of the websites, the Daily without Financial institutions, is headquartered in the United States.

The Federal Deposit Auto Insurance Company insists that the login password is uninsurable, which has been praised by Senator Elizabeth Warren, who is skeptical of the login password. The agency was one of three signatories to a recent statement that warned of the dangers of data encryption at financial institutions.