The Federal Deposit Insurance Corporation (FDIC) today published the Fact Sheet: What the Public Needs to Know About FDIC Deposit Insurance and Crypto Companies
Recently, some crypto companies have misrepresented to consumers that crypto products are eligible for FDIC deposit insurance coverage or that customers are FDIC–insured if the crypto company fails. These sorts of statements are inaccurate and can cause consumer confusion about deposit insurance and harm consumers under certain circumstances. The Fact Sheet is intended to address some common and emerging misconceptions about deposit insurance coverage and its application.
FDIC deposit insurance protects bank depositors in the unlikely event that an FDIC–insured bank fails. In such an event, the FDIC insures each bank depositor up to at least $250,000. Since the FDIC began insuring deposits in 1934, no depositor has lost a penny of FDIC–insured funds as a result of a bank failure.
However, deposit insurance does not apply upon the failure of a non–bank, such as a crypto company. In addition, deposit insurance does not protect consumers with non–deposit products such as stocks, bonds, mutual funds, securities, commodities, or crypto assets.
With the release of this Fact Sheet, the FDIC issued a Financial Institution Letter (FIL) containing an Advisory to FDIC Institutions Regarding Deposit Insurance and Dealings with Crypto Companies. This Advisory is directed to FDIC insured banks dealing with crypto companies, reminding them to confirm and monitor that these companies do not misrepresent the availability of deposit insurance.