A US financial institution regulator ordered crypto trade FTX on Friday to halt what it known as “false and deceptive” claims the trade had made about whether or not price range on the corporate are insured by way of the federal government.

The Federal Deposit Insurance Corporation stated a July tweet by way of Brett Harrison, head of FTX’s U.S. operations, contained deceptive claims that price range held at and shares bought thru FTX have been FDIC insured, and ordered the corporate to take away any deceptive language from its social media accounts and internet sites.

In the tweet, which Harrison has since deleted, he said that direct deposits from employers to the crypto trade are “saved in personally FDIC-insured financial institution accounts” and that shares bought by means of FTX US “are held in FDIC-insured” brokerage accounts.

The FDIC stated in its stop and desist letter to FTX US that the ones statements implied that FDIC insurance coverage was once to be had for cryptocurrency and inventory holdings, and that the company does no longer insure brokerage accounts.

In a tweet on Friday, FTX CEO Sam Bankman-Fried emphasised FTX isn’t FDIC-insured, and apologized if any individual misinterpreted earlier feedback.

The order, certainly one of 5 despatched to crypto corporations by way of the FDIC on Friday, comes as regulators have ramped up efforts to police crypto corporations that can be deceptive buyers on whether or not their price range revel in a central authority backstop.

The factor has come to a head of overdue, as turmoil within the crypto marketplace has led to worry and the cave in of a few top profile corporations.

The financial institution regulator issued a equivalent stop and desist letter to bankrupt crypto company Voyager Digital , arguing that the corporate had misled consumers by way of claiming their price range with Voyager can be lined by way of the FDIC.

Later, the FDIC issued an advisory urging banks coping with crypto firms to make sure that consumers are acutely aware of what kinds of belongings are government-insured, specifically in circumstances the place corporations be offering a mixture of uninsured crypto merchandise along insured financial institution deposit merchandise.

(Except for the headline, this tale has no longer been edited by way of NDTV team of workers and is printed from a syndicated feed.)