Crypto firm FTX gets warning from FDIC to stop ‘misleading’ consumers about deposit protection

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022.

The Federal Deposit Insurance Corporation told FTX to stop misleading consumers about the insurance status of their funds.

FTX US was one of the companies that received a letter from the FDIC. Cryptocurrencies are not protected by the government.

The regulators said that each of the companies made false representations on their websites and social media accounts.

FTX US was notified by the FDIC along with several other websites. The companies were told to take immediate corrective action. The agency said that it is against the law to imply that a product is insured.

According to the letter to FTX, the president of FTX.US stated on July 20 that direct deposits from employers are stored in the user's name.

Harrison deleted the post and didn't mean to say that employers hadUSD deposits at insured banks.

Harrison wrote that they didn't mean to suggest that FTX US or non-fiat assets benefited from FDIC insurance.

FTX.US is a U.S. exchange that has been focused on building its business outside of the US.

FTX is an ”FDIC-insured”cryptocurrencies exchange, according to the websites for SmartAsset and Crypto Sec.

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