FDIC Hits FTX.US With Cease-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 rapidly complied with the request.

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The Federal Deposit Insurance coverage Company has known 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 right this moment that 5 crypto corporations had made false and deceptive statements relating to 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 known as FDICCrypto.com.

In response to 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 among the FTX.US merchandise talked about by Harrison and the FTX.US web site have been in reality uninsured, that deposits weren’t protected to the claimed extent, and that the FDIC’s identify was being misused. 

The company known 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, nonetheless, his Twitter account nonetheless confirmed a number of tweets that probably suggest FTX.US was not directly insured by the FDIC.

Supply: Twitter

U.S. regulatory companies have been transferring in on crypto business leaders these days, particularly the Securities and Trade Fee, which just 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 writer of this piece owned ETH and a number of other different cryptocurrencies. 

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