The US Federal Deposit Insurance Corporation (FDIC) has sent a warning to 5 crypto money companies. The FDIC alleges that 5 companies, including FTX US, made “false and misleading statements.”
FDIC issued a warning to 5 cryptocurrency companies over deposit insurance
The US Federal Deposit Insurance Corporation has sent cease and desist letters to FTX US and four other cryptocurrency companies for allegedly making “false and misleading statements” regarding federal deposit insurance. According to the statements of the US editor:
Based on the evidence gathered by the FDIC, each of these companies has made false statements stating or suggesting that certain crypto-related products – including their websites and social media accounts – are FDIC insured or stocks held in brokerage accounts are FDIC insured.
Named firms: FTX US, Cryptonews.com, FDICCrypto.com, SmartAsset.com and Cryptosec.info.
According to the regulator, companies’ official websites and social media accounts contain misleading statements that certain crypto-related products are covered by FDIC insurance.
Voyager case
The FDIC announced late this month that Bitcoin businesses are not covered by federal custody insurance. This development followed Voyager, a crypto company, to declare bankruptcy. Subsequently, the FDIC requested that Voyager “stop and cease making false and misleading statements regarding the FDIC deposit insurance situation and take immediate action to correct such prior statements,” and that Voyager cease making false and misleading statements.
The cease-and-desist letter in the FTX US lawsuit cites a tweet from President Brett Harrison stating that direct contributions from employers to FTX and its stocks are held in FDIC-insured accounts. It also highlights the fact that FTX is listed on SmartAsset.com as an FDIC-insured exchange. According to the regulator, these claims that uninsured products are insured by the FDIC appear to be false and misleading.
Per the letter, the company must immediately remove all statements that claim FTX US and any entity that has deposits with it are FDIC insured. According to the FDIC’s announcement, FTX.US has 15 days to submit written confirmation that they comply with the requests. Meanwhile, no response has yet been received from the five listed businesses.
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