• Sun. Aug 14th, 2022

FDIC clarifies that cryptocurrencies are not insured

ByHazel R. Lang

Aug 1, 2022

The U.S. Federal Deposit Insurance Corporation (FDIC) clarified in a statement Friday that it only protects insured bank customers in the event of a bank failure, not assets issued by crypto companies.

See related article: Crypto lender Voyager ordered to stop misleading deposit insurance claims

Fast facts

  • The FDIC’s comments come a day after the insurer hit out at Voyager Digital for claiming it was FDIC insured and asked the lender to stop the misleading claims.
  • The FDIC insures bank deposits, which means depositors are reimbursed up to $250,000 if the bank fails.
  • The FDIC said it does not insure “non-bank customers against the default, insolvency, or bankruptcy of any non-bank entity, including crypto custodians, exchanges, brokers, wallet providers.” .
  • To avoid customer confusion, the federal insurer said crypto companies should clearly state that they are not insured banks, name the insured banks holding customer funds, and state that cryptocurrencies are not not FDIC insured products.
  • The FDIC said insured banks must actively ensure that the crypto companies they do business with are not making misleading claims by monitoring all marketing materials and disclosures.

See related article: Unconfirmed Voyager Crypto Refund Plan; fiat to be returned in full

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