The FDIC has issued cease and desist letters to five companies including FTX US for making cryptocurrency-related false or misleading representations about deposit insurance. The FDIC has said, “Based upon evidence collected by the FDIC, each of these companies made false representations—including on their websites and social media accounts—stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured.”

Senate Banking Committee Ranking Member Pat Toomey (R-PA) sent a letter to FDIC Director and Acting Chairman Martin Gruenberg on August 16 saying that he is investigating claims that the FDIC has blocked banks from doing business with crypto businesses. The letter says, “Personnel in the FDIC’s Washington, D.C., headquarters are urging FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto-related companies, without providing any legal basis for sending such letters.”

The Federal Reserve issued a supervisory letter directing banks to notify regulators before engaging in any new activity involving cryptocurrency startups or digital asset markets. It states, “Banking organizations engaging in crypto-asset-related activities face potential legal and consumer compliance risks,” and adds that, “if any supervised banking organization has questions regarding the permissibility of any crypto-asset-related activities or about the applicability of any filing requirements, it should consult its lead supervisory point of contact at the Federal Reserve.”

The FTC is ordering BitMart operators Bachi.Tech Corporation and Spread Technologies LLC to turn over information. The companies had been sent subpoenas in May seeking information about their security and how they have handled customer complaints, and the companies had pushed back on the request at the time, saying it was overly broad. The FTC denied their effort to block the FTC from compelling them to provide this information and is now investigating whether the companies misled users about their cybersecurity protections or failed to comply with financial services laws.

The Department of the Treasury announced that it has sanctioned digital currency mixer Tornado Cash, a service that officials say has been used by a North Korean hacking group (Lazarus Group) to launder more than $455 million in stolen funds. This marks the second time that Treasury has blacklisted a cryptocurrency mixing service.