Table of Contents
Abstract:
To deal with sure misrepresentations about FDIC deposit insurance coverage by some crypto corporations, the FDIC is issuing an Advisory to FDIC-insured establishments Concerning Deposit Insurance coverage and Dealings with Crypto Firms (FDIC Crypto Advisory). Moreover, a Reality Sheet on What the Public Must Know About FDIC Deposit Insurance coverage and Crypto Firms (Deposit Insurance coverage Reality Sheet) has been posted to FDIC’s web site to offer extra details about deposit insurance coverage protection.
The Advisory and Reality Sheet are hooked up.
Assertion of Applicability: The contents of, and materials referenced in, this FIL apply to all FDIC-insured monetary establishments.
Highlights:
Over the previous a number of months, some crypto corporations have suspended withdrawals or halted operations. In some circumstances, these corporations have represented to their prospects that their merchandise are eligible for FDIC deposit insurance coverage protection, which can lead prospects to imagine, mistakenly, that their cash or investments are secure.
The FDIC seeks to handle misconceptions concerning the scope of deposit insurance coverage protection and associated issues.
By federal regulation, the FDIC solely insures deposits held in insured banks and financial savings associations (collectively, “insured banks”) within the unlikely occasion of an insured financial institution’s failure. The FDIC doesn’t insure belongings issued by non-bank entities, similar to crypto corporations.
The FDIC Crypto Advisory reminds insured banks that they want to concentrate on how FDIC insurance coverage operates and must assess, handle, and management dangers arising from third-party relationships, together with these with crypto corporations.
In dealings with crypto corporations, FDIC-insured banks ought to affirm and monitor that these corporations don’t misrepresent the provision of deposit insurance coverage.
Simultaneous with issuance of this Crypto Advisory, the FDIC issued a Press Launch saying the posting of a Deposit Insurance coverage Reality Sheet to the FDIC’s webpage to make clear for patrons of non-bank entities, similar to crypto corporations, and the general public usually, that deposit insurance coverage doesn’t cowl non-deposit merchandise, together with crypto belongings.
The FDIC Crypto Advisory and Deposit Insurance coverage Reality sheet present a list of helpful assets for bankers and members of the general public for extra data.
Associated Subjects:
Deposit Insurance coverage
Digital Property
Third-Occasion Relationships
Associated Sources: