Crypto exchange FTX ordered to stop false claims

FTX, one of the major crypto exchanges, has been ordered by a US regulator to close “false and misleading” claims about fund insurance. The exchange had claimed that it is insured by the government of the fund. The Federal Deposit Insurance Corporation (FDIC) reported that FTX’s head of US business, Brett Harrison, said in a tweet last month that funds with the exchange and stocks purchased through it have been insured by the FDIC.

As reported by Reuters, the exchange has been asked by the regulator to remove such claims from its social media accounts and websites. Harrison later deleted the tweet claiming the insurance. The FDIC has clarified that it does not provide insurance for brokerage accounts.

Sam Bankman, chief executive officer of FTX, apologized for the misinformation in a tweet. They have said that the exchange does not have insurance from the FDIC. US regulators have cracked down on crypto firms making false claims about government guarantees for investors’ funds. The FDIC has also placed a similar order on bankrupted crypto firm Voyager Digital. The firm had told customers that their funds would be insured by the FDIC. The FDIC has also asked banks doing business with crypto firms to ensure that customers know what types of assets are insured by the government.

Almost a month ago, FTX roped in four-time Tennis Grand Slam singles champion Naomi Osaka as its brand ambassador. Osaka will receive payment for this in digital assets in addition to an equity stake in FTX Trading Ltd. As a brand ambassador, Osaka will increase the number of women on FTX’s platform and will also educate them about Web 3 technology. With the deal, Osaka is joined by legendary footballer Tom Brady, baseball player Shohei Ohtani and NBA affiliate Stephen Curry, who is already a brand ambassador for FTX.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)

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