blockworks.co
The Federal Deposit Insurance Corporation (FDIC) has warned five companies, including crypto exchange FTX US, to stop making false and misleading statements about FDIC deposit insurance, the agency revealed Friday.
In a letter sent to FTX US on Thursday, the FDIC wrote that the firm’s president, Brett Harrison, said in a July 20 tweet that “direct deposits from employers to FTX US are stored in individually FDIC-insured bank accounts in the users’ names.” The tweet also states that “stocks are held in FDIC-insured and SIPC-insured brokerage accounts.”
“FTX US is not FDIC-insured, the FDIC does not insure any brokerage accounts, and FDIC insurance does not cover stocks or cryptocurrency,” the FDIC said in the letter.
It continued: “The FDIC only insures deposits held in insured banks and savings associations…and FDIC insurance only protects against losses caused by the failure of insured institutions. Accordingly, these statements are likely to mislead, and potentially harm consumers.”
FTX is further identified as an FDIC-insured crypto exchange on SmartAsset.com and CryptoSec.info, according to the FDIC.
An FTX US spokesperson did not immediately return Blockworks’ request for comment.
In addition to sending cease-and-desist letters to FTX US, CryptoSec.info, SmartAsset.com, the FDIC also issued notices to Cryptonews.com and FDICCrypto.com for similar alleged violations.
This is a developing story.
Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.