The CEO of FTX cryptocurrency exchange, Sam Bankman-Fried took to Twitter on Friday by responding to misinterpreted claims that the crypto exchange is FDIC insured.
Bankman-Fried has denied the information that FTX.US is FDIC insured, he, however, apologized for any information that might have led to reports that FTX.US is FDIC insured.
In a tweet by him on August 19, he said that the banks working with FTX are FDIC insured, he furthered that FTX is looking for ways to use individual accounts to protect customers and hopes to work with the FDIC on that.
This tweet was a response to a cease and desist letter to FTX by FDIC that the exchange should stop deceiving users that it is FDIC insured.
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FDIC Sent Letters to 5 Crypto Companies About Misleading Statements
The U.S. Federal Deposit Insurance Corp. (FDIC) last week sent letters to 5 crypto-focused companies regarding misleading statements about their insurance.
According to the evidence gathered by the FDIC, some crypto firms including the Bankman-Fried FTX were making false representations on their social media handles and websites that their crypto products or stock in brokerage accounts were FDIC insured.
The FDIC letter to FTX also cited a tweet by Brett Harrison, FTX President who in the tweet said that FTX stored direct deposits in FDIC insured accounts under the user’s name.
Harrison deleted the tweet as a response to FDIC instructions, he, however, said that the tweet was a response to a question as to whether “direct USD deposits from employers were held at insured banks.”
He also corrected himself, saying, “We really didn’t mean to mislead anyone, and we didn’t suggest that FTX US itself, or that crypto/non-fiat assets, benefit from FDIC insurance. I hope this provides clarity on our intentions.”
Some crypto websites in their reports have been referring to FTX as an “FDIC insured” crypto firm, it is unknown hitherto if they have removed or changed the reference.
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