FDIC sends 5 companies, including FTX.US, cease and desist letters for making false statements about deposit insurance

The Federal Deposit Insurance Corporation (FDIC) said: August 19th has issued a letter requesting Cryptonews.com, Cryptoytosec.info, SmartAsset.com, FTX.US When FDICCrypto.com Stop making misleading statements about FDIC Deposit Insurance and take corrective action.

FDIC Deposit Insurance protects customers in the unlikely event that an FDIC-insured bank fails.

In a cease and desist letter sent on August 18, the FDIC asked companies, their officers and employees to refrain from implying the existence of FDIC deposit insurance on any particular exchange or on their platform. It also called on companies to take immediate steps to correct false and misleading statements previously made.

In its letter, the FDIC alleges that entities misrepresent the deposit insurance status of their assets or promote misrepresentations about deposit insurance coverage.

Based on the evidence provided by the FDIC in its letter, each company confirmed that certain crypto-related products were insured by the FDIC, including its website and social media accounts, or that its shares were held in brokerage accounts. allegedly made a false statement stating or implying that We are insured with the FDIC.

According to the FDIC’s letter to FTX.US, President Brett Harrison said on July 20, “Direct deposits from employers to FTX US are held in separate FDIC-insured bank accounts in the user’s name.” and tweeted, “Stocks are held in FDIC-US. Insured and SIPC Insured Brokerage Accounts.

Regulators claim these statements contain false and misleading representations about the company’s uninsured products. It added:

In fact, FTX US is not insured by the FDIC, the FDIC does not insure brokerage accounts, and FDIC insurance does not cover equities or cryptocurrencies.

In a letter to Cryptonews.com, the regulator cited five instances of many citations. In these instances, the website allegedly misrepresented or falsely characterized his FDIC insurance claims in cryptocurrency exchange reviews.

The FDIC pointed out Cryptosec.info to post a list of “FDIC-endorsed virtual currency exchanges” on its website along with the use of the FDIC’s official seal. SmartAsset.com also contributed to the list of FDIC-endorsed cryptocurrency exchanges that the FDIC has requested to remove.

Regulators claim that FDICCrypto.com used the institution’s name for its registered domain name. According to the FDIC, this indicates his affiliation with or endorsement of the FDIC and requires the company to immediately stop using the domain name or similar domain names.

The FDIC requires all companies to remove offending examples from their spaces and requires each entity to remove additional misleading statements and report compliance within 15 days. rice field.