Federal Deposit Insurance Corporation (FDIC) protection does not apply to cryptocurrency company bankruptcies, according to a new fact sheet released Friday by the agency.
FDIC Declares Cryptocurrency Companies Assets Are Not Covered By Institutional Insurance
In its press release, the FDIC said:
“Some cryptocurrency companies have made false statements to their consumers that their crypto products are eligible for FDIC deposit insurance coverage. Such statements are false and may confuse consumers about deposit insurance and may harm consumers.”
The two-page memo comes a day after the FDIC and the US Federal Reserve issued a joint cease and desist letter to crypto firm Voyager Digital over deposit insurance claims.
The letter states that Voyager is FDIC-insured to consumers, suggesting that customers investing in Voyager will be covered by FDIC insurance. “These statements are false and misleading,” the FIDC and Federal Reserve wrote.
The FDIC deposit insurance rules include:
“In the event an FDIC-insured bank goes bankrupt, the bank protects depositors and supports depositors up to $250,000. Since the FDIC began insuring deposits in 1934, no depositor has lost a penny of their insured funds.
Deposit insurance does not apply to the bankruptcy of a non-bank company such as a crypto company, and deposit insurance does not protect consumers with non-deposit products including stocks, bonds, securities, commodities or crypto assets, among other things.”
bitcoin Many crypto companies were in a difficult situation due to the decline in the price.
*Not investment advice.