TLDR: The Pres. of FTX made a confusing tweet about some external FDIC-insured accounts FTX uses to store some customer funds, that the FDIC claims could imply FTX accounts themselves are FDIC insured. And another tweet that says "stocks... are held in FDIC insured accounts," which is untrue since the FDIC does not insure stock holdings.
Seems likely it's a genuine mistake on their part, totally fair for the FDIC to call it out, and seems like as long as they acknowledge that the tweets could be misleading and give the tweeter a talk, it's just a warning.
> Seems likely it's a genuine mistake on their part
If the president of a financial services company didn't understand, in substantial detail, which types of account FDIC insurance applies to, I'd have some big questions about their capacity to manage a financial services company.
Read the tweet, it's not that he didn't understand, he was in fact talking about FDIC insured accounts, just ones that FTX uses, not FTX accounts themselves.
The FDIC is being a little pedantic here, but that's fine, it was a warning and he deleted the tweet.
> Read the tweet, it's not that he didn't understand, he was in fact talking about FDIC insured accounts, just ones that FTX uses, not FTX accounts themselves.
Yes, he's repeating an old scam that has played out a number of times in this space.
1. Build customer confidence by telling them that your[1] accounts[2] are FDIC-insured[3].
2. Go to Vegas and put all your customers' money on red.
3. Whoops.
It's fine for some Joe on reddit to be this willfully ignorant and misleading about how the technicalities of FTX, its accounts, and the FDIC work. But it's not fine for the CEO of FTX to do this. It's his job to know this shit, and it's his job to not mislead his customers. [4]
[1] And by your, we mean our.
[2] And by accounts, we mean our operating accounts.
[3] And we don't mean insured against us doing stupid shit with your money, we mean insured against our counterparty running off with our money.
[4] Well, it would be if he weren't running a fly-by-night wildcat bank.
I wouldn't be so quick to assume good faith. Voyager made the same "pedantic" mistake in their marketing materials and quite a few retail investors got a nasty surprise when they collapsed.
Given that Sam is one of Tether's biggest customers, plus his US campaign donations and efforts to deregulate derivatives markets (when has that ever been a bad idea?), I consider him far more dangerous than Mark Cuban could ever be.
Especially given that other crypto funds have deliberately misled customers about the presence and/or significance of FDIC insurance, and subsequently collapsed:
It seems like a mistake, but the sort of mistake that makes me even more wary of them.
They seemed to phrase things to imply things were more insured than not. It seemed like they tried their best to arrange the verbiage in a way where they could be technically correct while still giving the wrong impression. So if something went tits up, they could say, "No, what we said was this". And it seems like they messed that up. They crossed the line that they didn't want to cross.
So I'm sure that it was a mistake. They didn't mean to say the thing. But they really, really, really wanted to imply that thing. So, yeah, sketchy as hell.
Seems likely it's a genuine mistake on their part, totally fair for the FDIC to call it out, and seems like as long as they acknowledge that the tweets could be misleading and give the tweeter a talk, it's just a warning.