US agency hits 5 crypto firms with cease and desist over ‘false’ claims

The US Federal Deposit Insurance Corporation (FDIC) has issued cease-and-desist letters to five crypto companies, including leading cryptocurrency exchange FTX, over “false and misleading statements”.

Apart from FTX, Cryptonews.com, Cryptosec.info, SmartAsset.com, and FDICCrypto.com also received cease and desist letters on Friday, with the agency giving them 15 days to remove the “false and misleading statements” from their websites and social media accounts.

The FDIC also mentioned a now-deleted tweet that FTX CEO Brett Harrison sent on July 20, that read “direct deposits from employers to FTX US are stored in individually FDIC-insured bank accounts in the users’ names”.

Responding to the letter, Harrison said on Twitter on Friday that “we really didn’t mean to mislead anyone.”

“We didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance”, he claimed.

“Per the FDIC’s instructions, 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),” he mentioned.

For FDICCrypto.com, the agency said that the website’s owner registered the domain at the end of July and has been redirecting traffic to another site that offers crypto products, reports Decrypt.

“The FDIC is demanding that the owner immediately stop using the domain name,” the US agency added.

“Given the risks readily apparent in the crypto-asset markets, these are necessary and appropriate actions to take,” an FDIC spokesperson was quoted as saying.

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