Financial Regulator Slaps Crypto Exchange FTX US With Cease-and-Desist Letter Over ‘False’ Statements

The Federal Deposit Insurance coverage Company (FDIC) is hitting crypto change big FTX.US with a cease-and-desist order over allegedly making false statements.

In keeping with a brand new press launch issued by the monetary regulator, FTX.US has supposedly made statements that make it seem as if the merchandise they provide are FDIC-insured.

The FDIC says that FTX.US president Brett Harrison made the deceptive statements in July over his Twitter account when he mentioned that “direct deposits from employers to FTX.US are saved in particular person FDIC-insured financial institution accounts within the customers’ names” and “shares are held in FDIC-insured and SIPC-insured brokerage accounts.”

Says the FDIC,

“These statements seem to comprise false and deceptive representations that uninsured merchandise are insured by the FDIC, in addition to false and deceptive statements in regards to the extent of the style of safety offered by the FDIC deposit insurance coverage and misuse of the FDIC identify.

These false and deceptive statements characterize or suggest that FTX.US is FDIC-insured, that funds deposited with FTX.US are positioned, and always stay, in accounts at unnamed FDIC-insured banks, that brokerage accounts at FTX.US are FDIC-insured, and that FDIC insurance coverage is out there for cryptocurrency or shares.

In truth, FTX.US will not be FDIC-insured, the FDIC doesn’t insure any brokerage accounts, and FDIC insurance coverage doesn’t cowl shares or cryptocurrency.”

FDIC deposit insurance coverage refers back to the safety granted to prospects within the unlikely situation that an FDIC-insured establishment fails.

The regulatory physique is demanding that FTX.US takes corrective actions, comparable to eradicating all false statements that suggest they’re insured by the FDIC, by no means making such statements once more and proving inside 15 days that they met these necessities.

4 different crypto-related companies received comparable letters from the FDIC, together with Cryptonews.com, Cryptosec.data, SmartAssess.com and FDICCrypto.com.

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