The U.S. regulator Federal Deposit Insurance Corporation (FDIC) issued a letter against Sam Bankman-Fried’s FTX US demanding a “cease and desist” from making claims that its customers’ funds were protected by the government.
Apart from FTX, the FDIC also issued cease-and-desist orders to four other firms: SmartAsset, FDICCrypto, Cryptonews, and Cryptosec for deceiving the general public about several cryptocurrency-related products having FDIC insurance.
The FDIC claimed that Brett Harrison, the head of FTX’s U.S. operations, made false claims in a tweet that funds held at and stocks bought through FTX were FDIC insured. As a result, the FDIC ordered the company to delete any false statements from its websites and social media accounts.
In July, Harrison tweeted that direct deposits from employers to FTX are “stored in individually FDIC-insured bank accounts” and that stocks purchased via FTX US “are held in FDIC-insured” brokerage accounts.
Following FDIC’s response, Harrison tweeted “Per the FDIC’s instruction I deleted the tweet. The tweet was written in response to questions raised on Twitter regarding whether direct USD deposits from employers were held at insured banks (i.e. Evolve Bank).”
FTX is asked to remove all “statements, representations, or references” that suggest that FTX US is FDIC-insured, any FTX US brokerage accounts are FDIC-insured, and any funds held in cryptocurrency or other financial products are or can be protected by FDIC insurance.
The FDIC...
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