On August 19th, FTX and some other crypto companies were sent cease letters by the FDIC for releasing some misleading information. Sam Bankman-Fried, a crypto billionaire and the owner of FTX US, along with some news outlets including cryptosec.info, cryptonews.com, FDICCrypto.com, and SmartAsset.com, were accused of giving out false statements.
The FDIC has warned these news outlets and crypto-regulating companies to cease making any false accusations concerning the relationship between them and the Federal Deposit Insurance Corporation.
FTX US and the other companies have stated that some of the cryptocurrency-related products released by the platform are effectively insured by the FDIC. Another company has deceptively registered itself with a domain name that suggests its endorsement and sponsorship by the FDIC. According to the FDI (Federal Deposit Insurance) Act, endorsing or sponsoring any of the companies or exchanges is completely prohibited.
FDICCrypto.com was redirecting its customers to a website offering several services as a cryptocurrency exchange and service provider.
Today, we issued cease and desist letters to five companies and individuals for making crypto-related false and misleading representations about FDIC deposit insurance.
— FDIC (@FDICgov) August 19, 2022
FTX US is accused of violating the FDI ACT
The false and misleading statements released by FTX US and other related entities have violated the FDI Act. On July 20th, 2022, the president of FTX US, Brett Harrison, tweeted on his official Twitter handle, which stated that all the direct deposits made by the employees of FTX US are separately stored in the bank accounts insured by the FDIC.
Also, FTX US has gone as far as recognising itself as a cryptocurrency exchange insured by the FDIC—on the websites of CryptoSec.info and SmartAsset.com.