Alex Nguyen
The Federal Deposit Insurance Corp., which protects customers in certain bank failures, has reiterated that it doesn’t insure crypto assets.
The agency released an advisory on Friday to clarify the scope of its safeguards, and said several crypto companies had led customers to mistakenly believe that their products were FDIC-insured. The move comes a day after the agency demanded Voyager, a bankrupt crypto company that partnered with FDIC-insured Metropolitan Commercial Bank, to correct “false and misleading statements” about its deposit insurance coverage.
Voyager had said that US dollars deposited with it were covered by FDIC insurance because of its partnership with Metropolitan, but the FDIC said its protection didn’t extend to Voyager’s customers.
“The FDIC is concerned about the risks of consumer confusion or harm arising from crypto assets offered by, through, or in connection with insured depository institutions (insured banks),” the advisory read. “Risks are elevated when a non-bank entity offers crypto assets to the non-bank’s customers, while also offering an insured bank’s deposit products.”
The agency said it only protects deposit products offered by insured banks, like checking and savings accounts, when these institutions fail. Its coverage does not extend to financial products -- such as stocks, bonds, commodities or digital assets -- or losses due to theft or fraud.
