FDIC clarifies the status of cryptocurrency insurance

Customers will not be insured against losses in case of bankruptcy of crypto companies

01.08.2022 - 10:15

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What’s new? The US Federal Deposit Insurance Corporation (FDIC) issued a statement saying that it protects only customers of insured banks. Assets issued by crypto companies are not within the institution’s purview. FDIC representatives stressed that they do not insure customers of non-banks, such as custodial platforms, exchanges, brokers, or wallet providers, against default, insolvency, or bankruptcy.

Document on the FDIC’s website

What other statements have been made? Crypto companies must make it clear to their customers that they are not insured, and their digital assets do not fall under the protection of the FDIC either. In this, insured banks are required to actively ensure that partner crypto companies do not make misleading statements by monitoring all marketing materials and other public information.

Earlier, the FDIC demanded that the bankrupt crypto broker Voyager Digital remove information from its resources stating that its customers have insurance from the corporation. Voyager claimed that fiat assets would be compensated to users through a partnership with Metropolitan Commercial Bank, which has FDIC insurance. However, MCB said that the insurance coverage is only available to the broker’s customers in the event of the bank’s own bankruptcy.

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