Sunday, November 27, 2022

FDIC releases advisory on insurance, crypto

The FDIC issued an advisory to banks in late July regarding what it says are misrepresentations by some cryptocurrency companies that their products are eligible for FDIC deposit insurance coverage or that customers are FDIC-insured if the crypto company fails.

“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,” the agency said in the advisory. It added in dealings with crypto companies, “FDIC-insured banks should confirm and monitor that these companies do not misrepresent the availability of deposit insurance.”

You can read the entire advisory, as well as a two-page fact sheet remindiing the public the FDIC only insures deposts held in insured banks and savings associations, on the FDIC’s webpage at www.FDIC.gov.