Cryptocurrency exchange FTX has ordered a halt to US regulator’s ‘false and misleading’ claims
A US banking regulator ordered crypto exchange FTX on Friday to block what it calls “false and misleading” claims the exchange has made about whether the funds at the company are insured by the government.
The Federal Deposit Insurance Corporation said a tweet in July by Brett Harrison, FTX’s head of U.S. operations, contained misleading claims that the funds were held at and in stock. purchased through FDIC-insured FTX and asked the company to remove any misleading language from its social media accounts and websites.
In a tweet that Harrison has since deleted, he claims that direct deposits from employers into crypto exchanges are “stored in separate FDIC-insured bank accounts.” retail” and shares purchased through FTX US “are held in FDIC-insured brokerage accounts.”
The FDIC said in its cease and desist letter to FTX US that those claims imply that FDIC insurance is available for cryptocurrencies and stocks, and that the agency does not insure brokerage accounts.
In a tweet on Friday, FTX CEO Sam Bankman-Fried emphasized FTX is not FDIC insured and apologized if anyone misinterpreted the previous opinion.
The order, one of five sent to crypto companies by the FDIC on Friday, comes as regulators step up efforts to police crypto companies that may mislead investors about whether their fund is supported by the government.
The problem came up late, as the chaos in the crypto market led to tension and the collapse of several well-known companies.
The banking regulator has issued a similar cease-and-desist letter to bankrupt crypto firm Voyager Digital, alleging that the company misled customers by demanding their funds. them and Voyager will be covered by the FDIC.
The FDIC then issued an advisory urging banks dealing with cryptocurrency companies to ensure that customers know what types of assets are insured by the government, especially in the case of companies that offer crypto-assets. offers a combination of uninsured cryptocurrency products with insured bank deposit products.
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
