US FDIC says FTX & other four crypto platforms are misleading people

The United States Federal Deposit Insurance Corporation (FDIC) warned five crypto companies and ordered them to stop passing misleading information to the customers.

At present, crypto adoption is surging rapidly because of the innovative development works by crypto companies, which are solving real-life problems. However, here we are in a race of crypto adoption but due to the lack of regulatory support for this industry, crypto companies tried to show that they have a better level of support & customers don’t need to worry about the company’s services.

On 18 August, the FDIC agency released a warning notice for FTX US, SmartAsset.com, Cryptonews.com, Cryptosec.info, and FDICCrypto.com. 

FDIC agency warned these crypto companies not to spread misleading information about their product and services. According to FDIC, these companies are saying that some particular products are backed by the FDIC, which is false information.

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FDIC stated that:

“As per evidence gathered by the FDIC, each of these companies made misleading claims, including on their websites and social media profiles, that certain crypto-related products or stocks held in brokerage accounts are FDIC-insured.”

FDIC noted that, on 20 June, FTX president Brett Harrison “crossed the line”  on Twitter, when he said that “Direct employer deposits to FTX US are held in FDIC-insured bank accounts and “stocks are held in FDIC-insured and SIPC-insured brokerage accounts.”

In response to this cease & desist order, the FTX US president tweeted on 19 August and said that FTX US doesn’t want to mislead its customers and also his statements don’t mean that FTX’s non-fiat virtual assets are covered by FDIC insurance.

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).

— Brett Harrison (@Brett_FTX) August 19, 2022

FTX bans Zk.Money

As a part to take action against crypto mixing platforms, the FTX exchange banned a user of Zk.money users. According to reports, FTX exchange confirmed that the exchange doesn’t allow the customers to deal with risky crypto addresses.

FTX said Industry-leading third-party transaction monitoring tools ensure users do not interact with high-risk addresses, it is recommended not to use the mixing service in the future, otherwise it may endanger the FTX account.

— Wu Blockchain (@WuBlockchain) August 19, 2022

Read also: Dogecoin is not a meme coin, Here is why?

US FDIC says FTX & other four crypto platforms are misleading people

 

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