Five crypto firms, including crypto exchange FTX.US, have received cease and desist warnings from the Federal Deposit Insurance Corporation (FDIC) to stop misleading the extent of FDIC deposit insurance on August 19. FTX.US was mentioned as being FDIC-insured. Such claims, according to the regulatory authorities, are likely to mislead consumers and/or cause them harm. The organisation declared that FTX.US is not FDIC-insured.
According to orders issued to the websites Cryptonews.com, Cryptosec.com, SmartAsset.com, and FDICCrypto.com that these “businesses made deceptive claims”. Federally regulated bank accounts are covered by the FDIC up to $250,000 per account. The companies have 15 days in each case to inform the FDIC in writing of the “false and misleading representations” that have been posted on their websites and social media profiles.
According to a letter the FDIC delivered to FTX.US on August 18, “Stocks are held in FDIC-insured and SIPC-insured brokerage accounts,” the tweet ads. In a recently deleted tweet from FTX.US CEO Brett Harrison on July 20, the FDIC drew attention to the fact that “direct contributions from employers to FTX.US are maintained in individually FDIC-insured bank accounts in the users’ names.”
The FDIC demanded that FTX.US erase all mention of the demonstrably bogus deposit insurance claims in its cease and desist letter.