FDIC clarifies that cryptocurrencies are not insured
The U.S. Federal Deposit Insurance Corporation (FDIC) clarified in a statement on Friday that it only protects insured bank customers in case a bank fails, and not assets issued by crypto companies.
See related article: Crypto lender Voyager ordered to stop misleading claims over deposit insurance
Fast facts
- The FDIC’s comments come a day after the insurer lashed out at Voyager Digital for claiming it is FDIC-insured and asked the lender to stop misleading claims.
- The FDIC insures bank deposits, which means depositors are reimbursed up to US$250,000 in case the bank fails.
- The FDIC said that it does not insure a “non-bank’s 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 that crypto companies should clearly state that they are not insured banks, name the insured banks holding customer funds, and convey that cryptocurrencies are not FDIC-insured products.
- The FDIC said that insured banks need to actively ensure that the crypto companies they deal with do not make misleading claims by monitoring all marketing material and disclosures.
See related article: Voyager crypto refund plan unconfirmed; fiat to be returned in full
