Summary:
- The Federal Deposit Insurance Corporation has sent letters to FTX.US, Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com.
- The letters inform the companies to correct statements on their websites and social media accounts that suggest that some of their crypto products are FDIC insured.
- FTX has since taken corrective measures to comply with the FDIC’s requests.
The Sam Bankman-Fried-led crypto exchange, FTX.US, alongside Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com, have received cease-and-desist warnings from the Federal Deposit Insurance Corporation, telling them to stop misleading consumers that some of their investment products are FDIC insured.
The letter by the FDIC stated that the five companies made false representations on their websites and social media accounts that suggested that certain crypto-related products or stocks held in brokerage accounts are FDIC insured. One of the companies cited went a step further by registering a website domain that suggests it is affiliated with the Insurance agency.
The letter added that:
The Federal Deposit Insurance Act (FDI Act) prohibits any person from representing or implying that an uninsured product is FDIC–insured or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act further prohibits companies from implying 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.
In particular, the FDIC told FTX that on July 20th, FTX.US president, Brett Harrison, tweeted that direct deposits from employers are stored in FDIC-insured accounts in the user’s name. Mr. Harrison has since deleted the Tweet and explained that he did not mean that the FDIC insured crypto deposits on FTX, but rather ‘USD deposits from employers were held at insured banks.’
https://twitter.com/Brett_FTX/status/1560701321983950848
More About the FDIC
The Federal Deposit Insurance Corporation is one of two US agencies that offer deposit insurance to depositors. The other is the National Credit Union Administration. The FDIC was created by Congress ‘to maintain stability and public confidence in the nation’s financial system.’ The agency also provides tools, education, and news updates to help American consumers make more informed decisions to protect their assets.
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