FTX founder Sam Bankman-Fried has denied that the exchange has FDIC insurance while apologizing for any information that might have been misinterpreted to mean FTX.US is FDIC-insured.
In an August 19 tweet, he explained that the banks working with FTX have FDIC insurance and also mentioned that the exchange is looking for ways to use individual accounts to protect customers and hopes to work with the FDIC on that.
1) Clear communication is really important; sorry!
FTX does not have FDIC insurance (and we’ve never said so on website etc.); banks we work with do. We never meant otherwise, and apologize if anyone misinterpreted it. https://t.co/MHMSMDE8Le
— SBF (@SBF_FTX) August 19, 2022
The tweets come after the FDIC sent a cease and desist letter to FTX, asking it to stop misleading customers by telling them it is insured.
FDIC Writes 5 Crypto Firms About Misleading Statements
The letter was sent to five crypto-focused businesses. FDIC alleged that gathered evidence showed that these companies were making false representations on their websites and social media about their crypto products or stock in brokerage accounts being FDIC insured.
The letter to FTX also referenced the tweet by FTX.US President Brett Harrison, who said that FTX stores direct deposits in FDIC-insured accounts under the user’s name.
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
Harrison has since deleted the tweet per FDIC instructions and said it 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.”
References About FTX US Being FDIC-insured Remains
However, it appears that Harrison did not delete all the tweets where he referenced that FTX brokerage accounts are FDIC insured.
Additionally, some websites such as CryptoSec, Cryptonews, and SmartAsset also refer to FTX as an FDIC-insured exchange. It is unknown if they have removed this reference.
FDIC has been doubling down on its efforts to stop crypto-focused companies from misleading their customers in recent weeks. This is likely due to the incident with the bankrupt crypto lender, Voyager Digital.
Voyager claimed it was FDIC insured, which likely influenced several of its customers to use its services.
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