FDIC Hits FTX.US With Stop-and-Desist Letter

Home » FDIC Hits FTX.US With Stop-and-Desist Letter

Key Takeaways

  • The FDIC says FTX.US and its President, Brett Harrison, have made false claims in regards to the alternate’s deposit insurance coverage standing.
  • The company is asking on Harrison and FTX.US to cease-and-desist from making statements implying FTX.US was FDIC-insured.
  • Harrison claims to have shortly complied with the request.

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The Federal Deposit Insurance coverage Company has referred to as upon FTX.US President Brett Harrison to take down a tweet suggesting that FTX.US was FDIC-insured.

False and Deceptive Statements

FTX.US simply ran afoul of a U.S. regulator.

The Federal Deposit Insurance coverage Company (FDIC) introduced at this time that 5 crypto corporations had made false and deceptive statements concerning the standing of their deposit insurance coverage. Crypto alternate FTX.US and its President, Brett Harrison, have been named alongside Cryptonews, CryptoSec, SmartAsset, and an internet site referred to as FDICCrypto.com.

In accordance with the company, Harrison falsely claimed on Twitter that “direct deposits from employers to FTX.US have been saved in individually FDIC-insured financial institution accounts within the customers’ names” and that firm shares have been held in “FDIC-insured and SPIC-insured brokerage accounts.” The company moreover criticized the corporate for figuring out as FDIC-insured on its web site.

The FDIC acknowledged that a few of the FTX.US merchandise talked about by Harrison and the FTX.US web site have been in actual fact uninsured, that deposits weren’t protected to the claimed extent, and that the FDIC’s identify was being misused. 

The company referred to as on Harrison and FTX.US to instantly take away all statements suggesting, explicitly or implicitly, that FTX.US was FDIC-insured. It moreover requested them to stop and desist from making additional such statements and to offer the FDIC with written affirmation and proof that it has complied. Failure to take action would open up the crypto alternate and Harrison to civil financial penalties.

Harrison responded to the letter by stating that “per the FDIC’s instruction I deleted the tweet” and that he and FTX.US “actually didn’t imply to mislead anybody.” At press time, nevertheless, his Twitter account nonetheless confirmed a number of tweets that probably indicate FTX.US was not directly insured by the FDIC.

Supply: Twitter

U.S. regulatory businesses have been shifting in on crypto business leaders currently, particularly the Securities and Alternate Fee, which lately opened an investigation into Coinbase for allegedly promoting unregistered securities and is reportedly probing different main exchanges.

Disclosure: On the time of writing, the creator of this piece owned ETH and a number of other different cryptocurrencies. 

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