Key Takeaways
The FDIC says FTX.US and its President, Brett Harrison, have made false claims concerning the trade’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 Corporation has known as upon FTX.US President Brett Harrison to take down a tweet suggesting that FTX.US was FDIC-insured.
False and Misleading Statements
FTX.US simply ran afoul of a U.S. regulator.
The Federal Deposit Insurance Corporation (FDIC) introduced as we speak that 5 crypto corporations had made false and deceptive statements relating to the standing of their deposit insurance coverage. Crypto trade FTX.US and its President, Brett Harrison, had been named alongside Cryptonews, CryptoSec, SmartAsset, and an internet site known as FDICCrypto.com.
According to the company, Harrison falsely claimed on Twitter that “direct deposits from employers to FTX.US were stored in individually FDIC-insured bank accounts in the users’ names” and that firm shares had 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 number of the FTX.US merchandise talked about by Harrison and the FTX.US web site had been in reality uninsured, that deposits weren’t protected to the claimed extent, and that the FDIC’s title was being misused.
The company known as on Harrison and FTX.US to right away 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 trade 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 “really didn’t mean to mislead anyone.” At press time, nevertheless, his Twitter account nonetheless confirmed a number of tweets that presumably indicate FTX.US was not directly insured by the FDIC.
U.S. regulatory businesses have been shifting in on crypto business leaders these days, particularly the Securities and Exchange Commission, which not too long ago opened an investigation into Coinbase for allegedly promoting unregistered securities and is reportedly probing different main exchanges.
Disclosure: At the time of writing, the writer of this piece owned ETH and a number of other different cryptocurrencies.
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