FDIC Orders Crypto Exchange FTX US, 4 Others to Cease 'Misleading' Claims

The U.S. Federal Deposit Insurance Corp. (FDIC) published five cease-and-desist orders Friday, including one to crypto exchange FTX US, alleging they mislead investors by suggesting their accounts are insured through the government agency. From a report: The Cryptonews.com, Cryptosec.com, SmartAsset.com and FDICCrypto.com websites were also directed to cease these alleged misrepresentations. The FDIC said these "companies made false representations" that suggested their products might be insured by the agency. The FDIC covers federally regulated bank accounts, up to $250,000 per account. The FDIC previously ordered now-bankrupt Voyager Digital to cease making claims that implied its customers' funds might have been insured by the FDIC. It later issued a broader warning to the crypto industry at large, saying FDIC protections extend to banks but not to crypto companies that have bank accounts. Friday's letters said several other websites were making specific inaccurate claims about which crypto companies had FDIC insurance. "The Federal Deposit Insurance Act (FDI Act) prohibits any person from representing or implying that an uninsured product is FDIC-insured or from knowingly misrepresenting the extent and manner of deposit insurance. The FDI Act further prohibits companies from implying that their products are FDIC-insured by using 'FDIC' in the company's name, advertisements or other documents," the agency said. "The FDIC is authorized by the FDI Act to enforce this prohibition against any person."

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