FDIC warns FTX to stop 'misleading' customers about deposit protection.
By The Exchange Team
The FDIC warned FTX, managed by Sam Bankman-Fried, to avoid "misleading" consumers about their money' insurance status.
Five crypto firms, including FTX US, received FDIC notices. Unlike bank savings, crypto in brokerage accounts aren't government-protected.
“Based on FDIC data, each of these companies made fraudulent statements, on their websites and social media accounts,” the regulator said.
FDIC also alerted Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com, and directed them to "take urgent corrective action".
Federal Deposit Insurance Act prohibits misrepresenting or indicating an uninsured product is FDIC-insured.
Brett Harrison, head of FTX.US, tweeted on July 20 that direct deposits from employers are maintained in FDIC-insured accounts in the user's name.
Harrison tweeted Friday that he edited the message and didn't mean to say FTX crypto assets are FDIC-covered.