Additionally, cease and desist letters were delivered to SmartAsset.com, Cryptonews.com, and Cryptosec.info on Friday, the organization claims in reaction to their “false statements” that their items were FDIC-insured.
The businesses have 15 days in each case to take down the “false and misleading representations” from their websites and social media profiles and to give written proof to the FDIC.
In a now-deleted tweet from FTX US CEO Brett Harrison on July 20, the FDIC drew attention to the fact that “direct contributions from employers to FTX US are maintained in individually FDIC-insured bank accounts in the users’ names.”
Harrison responded to the letter today on Twitter, saying, “We genuinely didn’t mean to mislead anyone, and we didn’t indicate that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance.” Harrison continued by saying that he thinks this “provides clarity” regarding the company’s goals.
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).August 19, 2022
“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).”
What is All the Matter about?
The organization said that reviews of cryptocurrency exchanges published on Cryptonews.com stated that Coinbase, eToro US, Crypto.com, and Gemini were FDIC-insured. The banking regulator noticed websites on CryptoSec.com and SmartAsset.com that contain lists of “FDIC-insured cryptocurrency exchanges.”
The agency claims that the owner of FDICCrypto.com registered the domain at the end of July and has been sending visitors to another website that sells cryptocurrency products. The FDIC requests that the owner stop using the domain name immediately.
The letters were sent to the banking agency only a few days after Sen. Pat Toomey (R-PA) made public a letter he sent there, stating that his office had received numerous reports from informants that “staff at the FDIC’s Washington, D.C. headquarters are urging FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto-related companies.”
The FDIC informed on Wednesday that its measures were consistent with its duty to ensure banks securely use cryptocurrency.
According to an agency representative, “this may involve the FDIC urging that an institution postpone commencing or refrain from expanding crypto-related activity until supervisory feedback is taken into account. These are important and acceptable precautions to take given the hazards apparent in the crypto-asset markets.”