FDIC Warns Crypto Firms Against “Misleading Claims of Insurance”

The Federal Deposits Insurance Corporation has issued a warning to five cryptocurrency firms over allegations of providing customers with misleading claims about deposit insurance.

The firms included FTX US, Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com.

Their actions, the FDIC said go against the Federal Deposit Insurance Act.

“Based upon evidence collected by the FDIC, each of these companies made false representations —including on their websites and social media accounts — stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured,” the FDIC said in a statement in this regard.

The FDIC thereby warned the firms to take immediate actions to address “these false or misleading statements.”

However, one of the executives of the firms, the President of FTX Cryptocurrency Derivatives, Brett Harrison in a tweet said that the claims by FTX.Uk was wrongly misinterpreted by the FDIC.

“Per the FDIC’s instruction, I deleted the tweet. The tweet was written in response to questions raised on Twitter regarding whether direct USD deposits from employers were held at insured banks (i.e. Evolve Bank).

“We really didn’t mean to mislead anyone, and we didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance. I hope this provides clarity on our intentions. Happy to work directly with the FDIC on these important topics.” Harrison said in the tweet.

The FDIC has warned severally, that cryptocurrencies stored with brokerages are not protected through insurance by the government.


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