The U.S. Federal Trade Commission (FTC) has warned consumers that crypto deposits are not insured by the Federal Deposit Insurance Corporation (FDIC). “That money isn’t FDIC insured or protected if the crypto company goes under,” the agency cautioned. “If something happens, the government may not have an obligation to step in and help get your money back.”
FTC’s Crypto Warning
The U.S. Federal Trade Commission (FTC) issued a Consumer Alert on Thursday warning that crypto assets are not FDIC-insured. The FDIC is an independent federal agency that provides insurance for bank deposits held by member institutions of up to $250,000 per depositor.
“If your bank is FDIC insured, you’re protected up to $250,000 if the bank fails,” FTC’s Consumer Education Specialist Cristina Miranda explained. In contrast, she stressed:
The funds you deposit with a crypto-based financial services provider … That money isn’t FDIC insured or protected if the crypto company goes under.
She then brought up Voyager Digital LLC, a crypto-based financial services provider, stating that the company “misled people with claims that money deposited through a ‘Voyager App’ was FDIC insured if anything went wrong.”
Miranda clarified: “Despite its claims, Voyager was never an FDIC insured bank. And FDIC insurance doesn’t cover crypto (also called crypto assets.) So, when Voyager eventually failed and filed for bankruptcy, people with accounts were locked out and lost money.”
Voyager and its affiliated companies have agreed to be permanently banned from offering, marketing, or promoting any products or services that could be used to deposit, exchange, invest, or withdraw any assets, the FTC explained. The government agency advised:
Know that crypto deposits are not FDIC insured, period. If something happens, the government may not have an obligation to step in and help get your money back.
What do you think about FTC’s warning that crypto deposits are not FDIC-insured? Let us know in the comments section below.
