The Federal Deposit Insurance Corporation (FDIC) has issued an advisory on crypto currency insurance.
The advisory tagged “Advisory to FDIC-Insured Institutions Regarding Deposit Insurance and Dealings with Crypto Companies” warned that “the FDIC does not insure assets issued by non-bank entities, such as crypto companies.”
The FDIC said that the report seeks to address misconceptions regarding the range of deposit insurance coverage and related concerns.
“Over the past several months, some crypto companies have suspended withdrawals or halted operations. In some cases, these companies have represented to their customers that their products are eligible for FDIC deposit insurance coverage, which may lead customers to believe, mistakenly, that their money or investments are safe.
“By federal law, the FDIC only insures deposits held in insured banks and savings associations (collectively, “insured banks”) in the unlikely event of an insured bank’s failure. The FDIC does not insure assets issued by non-bank entities, such as crypto companies.
In addition to this advisory, the FDIC says that it has posted a Deposit Insurance Fact Sheet on the FDIC’s webpage.
This seeks to provide clarification for customers of non-bank entities, such as crypto companies, and the public generally, that deposit insurance does not cover non-deposit products, including crypto assets.
The FDIC Crypto Advisory and Deposit Insurance Fact sheet provide a listing of useful resources for bankers and members of the public for more information.