Regulators have a weak case against FTX on deposit insurance

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In a cease-and-desist letter to fast-growing crypto exchange FTX, the Federal Deposit Insurance Corporation (FDIC) shed light on a now-deleted tweet from the exchange’s president, Brett Harrison, and issued a stark warning over the company’s messaging.

Harrison’s original tweet said, “Direct deposits from employers to FTX US are stored in individually FDIC-insured bank accounts in the users’ names.” He added, “Stocks are held in FDIC-insured and SIPC [Security Investor Protection Corporation]-insured brokerage accounts.”

Although Harrison stewarded FTX to its best-ever year in 2021, increasing revenue by 1,000%, the firm now faces the unenviable prospect of running afoul of a powerful government agency.more information