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Deposits at non-bank entities, including crypto firms, are not insured — FDIC

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cointelegraph.com

The United States Federal Deposit Insurance Corporation, or FDIC, has issued an advisory informing the public it “does not insure assets issued by non-bank entities, such as crypto companies.”In a Friday notice, the FDIC advised banks in the U.S.

that they needed to assess and manage risks in third-party relationships with crypto firms. The government agency said that while deposits at insured banks were covered for up to $250,000, no such protections applied “against the default, insolvency, or bankruptcy of any non-bank entity, including crypto custodians, exchanges, brokers, wallet providers, or other entities that appear to mimic banks.”“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,” said the FDIC. “These sorts of statements are inaccurate and can cause consumer confusion about deposit insurance and harm consumers under certain circumstances.”Today, we issued an advisory to FDIC-insured financial institutions on FDIC deposit insurance and the risks of dealing with #crypto-asset companies.

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