The U.S. FTC (Federal Trade Commission) has warned investors and consumers that cryptocurrency deposits aren’t insured by the FDIC (Federal Deposit Insurance Corporation). The agency further cautioned, “That money isn’t FDIC insured or protected if the crypto company goes under. If something happens, the government may not have an obligation to step in and help get your money back.”
FTC’s Crypto Warning:
On Thursday, the US-based FTC (Federal Trade Commission) released a Consumer Alert warning that cryptocurrency assets are not actually FDIC-insured. The FDIC is an autonomous agency for providing insurance for different bank deposits typically held by multiple member institutions of up to 250,000 dollars per depositor.
Cristina Miranda, the Consumer Education Specialist at FTC, explained, “If your bank is FDIC insured, you’re protected up to $250,000 if the bank fails. 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.”
Then, she brought up a cryptocurrency-based financial service provider, Voyager Digital LLC, stating that this company has actually “misled people with claims that money deposited through a ‘Voyager App’ was FDIC insured if anything went wrong.”
Plus, Miranda also 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.”
Meanwhile, Voyager, as well as its affiliated companies, have also agreed to be banned permanently from promoting services or products that could also be utilized for depositing, exchanging, investing, or withdrawing any assets, as per FTC’s explanation.
In this context, 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.”