FDIC Issues Cease and Desist Orders to 5 Crypto Firms Including FTX US Exchange

FDIC Issues Crypto-Related Cease-and-Rate to 5 Companies Including FTX US Exchange – Regulation

The Federal Deposit Insurance Corporation (FDIC) has sent a strike letter to five companies, including crypto exchange FTX US. CEO Sam Bankman-Fried explained that FTX does not have FDIC insurance, stating, “We never meant otherwise, and apologize if anyone misinterpreted it… to be clear that FTX US is not FDIC insured.”

FDIC orders 5 companies to strike and strike

The Federal Deposit Insurance Corporation (FDIC) issued crypto-related shutdown orders to five companies on Friday. The agency regulates and insures the deposits of FDIC-insured community banks and other financial institutions.

The letters demand that the five companies and their officers “stop and refrain from making false and misleading statements about FDIC deposit insurance.” They must also “take immediate corrective action to address these false or misleading statements.”

The five companies are FTX US, Cryptonews.com, Cryptosec.info, Smartasset.com and FDICCrypto.com.

The FDIC detailed:

Each of these companies has made false statements – including on their websites and social media accounts – stating or implying that certain crypto-related products are FDIC-insured or that stocks in brokerage accounts are FDIC-insured.

According to the FDIC, Cryptonews.com has reviews on its website claiming that the crypto trading platforms Coinbase, Etoro, and Gemini are FDIC-insured. Cryptosec.info and Smartasset.com provide a list of FDIC-insured crypto exchanges, including Crypto.com, Luno, Robinhood, and Voyager. Meanwhile, FDICCrypto.com shamelessly registered a website with FDIC in its domain name.

FTX US ordered to strike and cease

FTX US is one of the crypto companies that received a suspension letter from the FDIC.

While FTX and FTX US are two separate trading platforms, they were both founded by Sam Bankman-Fried, who is currently the CEO of both companies. Global exchange FTX does not allow US residents to trade on its platform.

Bankman-Fried apologized on Twitter for the confusion over FDIC insurance. “Clear communication is very important; sorry!” he tweeted. “FTX does not have FDIC insurance (and we never said so on the website etc); banks we work with do. We never meant otherwise and apologize if anyone misinterpreted it .” In a follow-up tweet, he emphasized: “To be clear, FTX US is not FDIC insured.”

FDIC Issues Crypto-Related Ceasefire Orders To 5 Companies Including FTX US Exchange

This was not the first time the FDIC has taken action against crypto firms. The regulator and the Federal Reserve Board sent a letter to Voyager Digital last month demanding that the cryptocurrency lender stop making false or misleading statements about the status of deposit insurance. Voyager filed for bankruptcy protection last month.

What do you think of the FDIC issuing crypto-related shutdown orders to five companies? Let us know in the comments below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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