FDIC writes FTX, and four others over misrepresentation

Five companies, their top officials, and their staff have landed in the troubled waters of the Federal Deposit Insurance Corporation (FDIC). The FDIC has warned the companies to disembark from making false accusations against the agency. 

The FDIC revealed that the affected firms include FTX US, owned by the crypto billionaire Sam Bankman-Fried, and news outlets Cryptonews.com, Cryptosec.info, SmartAsset.com, and the site FDICCrypto.com. The agency added that it has some evidence that organizations made false statements about the FDIC deposit Insurance. 

According to the FDIC, some evidence includes comments on their webpage and social media handles. The FDIC alleged that these companies claimed that some of their crypto products are insured by the FDIC. The agency added that these organizations also misled their customers with claims that the FDIC insures stocks in their brokerage accounts.

Further revelation by the agency indicated that one of the erring firms registered a website with claims that the FDIC endorses it. Therefore, the agency took a step to disassociate itself from the firm and warned them to stop misleading their customers. This misappropriate act has forced the agency to speak out against it.

Meanwhile, the Federal Deposit Insurance Act strongly frowns on individuals and entities for claiming that the agency backs uninsured products. The act also bars any form of misrepresentation regarding deposit insurance. Furthermore, the act bans using the agency’s name in commercials, documents, agreements, or proposals relating to uninsured products. This act gives full backing to the agency to sanction any individual, entity, or organization that violates these stipulations.

However, the agency has urged customers always to make inquiries about the insurance of products and companies. The FDIC encourages customers to reach out to its agents, the agency’s BankFind tool, and signs at the institution.

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