Summary:
To address certain misrepresentations about FDIC deposit insurance by some crypto companies, the FDIC is issuing a Notice to FDIC-Insured Institutions Regarding Deposit Insurance and Dealings with Crypto Companies (FDIC Crypto Advisory) . In addition, a fact sheet on what the public needs to know about FDIC deposit insurance and crypto companies (Deposit Insurance Fact Sheet) has been posted on the FDIC website to provide additional information on deposit insurance coverage.
The Advice and information sheet are attached.
Applicability statement: The content and material referenced in this FIL apply to all financial institutions insured by the FDIC.
Highlights:
Over the past few months, some crypto companies have suspended withdrawals or halted operations. In some cases, these companies have demonstrated to their customers that their products are eligible for FDIC deposit insurance coverage, which may lead customers to mistakenly believe that their money or investments are safe.
The FDIC seeks to address misconceptions about the scope of deposit insurance coverage and related concerns.
By federal law, the FDIC only insures deposits in insured banks and savings associations (collectively, “insured banks”) in the unlikely event of the failure of an insured bank. The FDIC does not insure assets issued by non-bank entities, such as crypto companies.
The FDIC Crypto Advisory reminds insured banks to be aware of how FDIC insurance works and to assess, manage, and monitor risks arising from relationships with third parties, including those with crypto companies.
In dealing with crypto companies, FDIC-insured banks should confirm and monitor that these companies do not misrepresent the availability of deposit insurance.
Concurrently with the issuance of this Cryptography Notice, the FDIC issued a press release announcing the posting of a deposit insurance fact sheet on the FDICC website to provide clarification to non-bank customers , such as crypto companies, and the general public, that deposit insurance does not cover non-deposit products, including crypto assets.
The FDIC’s Crypto Advisory and Deposit Insurance Fact Sheet provides a list of useful resources for bankers and members of the public to learn more.
Advising FDIC-insured institutions on FDIC deposit insurance and dealings with crypto companies
Fact Sheet: What the Public Needs to Know About FDIC Deposit Insurance and Crypto Companies
Related topics:
Deposit Insurance
Digital assets
Relations with third parties
Related Resources:
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