FDIC orders 5 companies to cease and desist
The Federal Deposit Insurance Corporation (FDIC) issued crypto-related cease-and-desist orders to five companies on Friday. The agency regulates and insures the deposits of community banks and other financial institutions that are insured by the FDIC. The letters demand that the five companies and their executives “cease and desist from making false and misleading statements about the safety of FDIC deposits.” They must also “take immediate corrective action to address such false or misleading statements.” The five companies are FTX US, Cryptonews.com, Cryptosec.info, Smartasset.com and FDICCrypto.com. The FDIC in detail: Each of these companies made false statements — including on their websites and social media accounts — stating or implying that certain crypto-related products are insured by the FDIC or that stocks held in brokerage accounts are insured by the FDIC. According to the FDIC, Cryptonews.com has reviews on its website that claim that Coinbase, Etoro and Gemini cryptocurrency trading platforms are FDIC insured. Cryptosec.info and Smartasset.com provide a list of FDIC-insured crypto exchanges that include Crypto.com, Luno, Robinhood, and Voyager. Meanwhile, FDICCrypto.com blatantly registered a website with the FDIC in its domain name.
FTX US was ordered to cease and desist
FTX US is one of the crypto companies that received a cease and desist letter from the FDIC. Although 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 FTX exchange does not allow US residents to trade on its platform. Bankman-Fried apologized for the confusion about FDIC insurance on Twitter. “Clear communication is really important. sorry!” he tweeted. “FTX does not have FDIC insurance (and we’ve never said so on the website etc). the banks we work with do. We never meant otherwise and apologize if anyone misinterpreted it.” In a subsequent tweet, he emphasized: “To be clear, FTX US is not FDIC insured.” This wasn’t the first time the FDIC took action against crypto companies. The regulator and the Federal Reserve Board issued a letter to Voyager Digital last month demanding that the cryptocurrency lender cease and desist from making false or misleading statements about its deposit insurance status. Voyager filed for bankruptcy last month. What do you think about the FDIC issuing crypto-related cease and desist orders to five companies? Let us know in the comments section below. Kevin Helms An Austrian Economics student, Kevin discovered 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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