To address certain misrepresentations about FDIC deposit insurance by some crypto companies, the FDIC is issuing an Advisory to FDIC-insured institutions Regarding Deposit Insurance and Dealings with Crypto Companies (FDIC Crypto Advisory). Additionally, a Fact Sheet on What the Public Needs to Know About FDIC Deposit Insurance and Crypto Companies (Deposit Insurance Fact Sheet) has been posted to FDIC's website to provide additional information about deposit insurance coverage.
The Advisory and Fact Sheet are attached.
Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-insured financial institutions.
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 FDIC seeks to address misconceptions about the scope of deposit insurance coverage and related concerns.
By federal law, the FDIC only insures deposits held in insured banks and savings associations (collectively, “insured banks”) in the unlikely event of an insured bank’s failure. The FDIC does not insure assets issued by non-bank entities, such as crypto companies.
The FDIC Crypto Advisory reminds insured banks that they need to be aware of how FDIC insurance operates and need to assess, manage, and control risks arising from third-party relationships, including those with crypto companies.
In dealings with crypto companies, FDIC-insured banks should confirm and monitor that these companies do not misrepresent the availability of deposit insurance.
Simultaneous with issuance of this Crypto Advisory, the FDIC issued a Press Release announcing the posting of a Deposit Insurance Fact Sheet to the FDIC’s webpage to clarify for customers of non-bank entities, such as crypto companies, and the public generally, that deposit insurance does not cover non-deposit products, including crypto assets.
The FDIC Crypto Advisory and Deposit Insurance Fact sheet provide a listing of useful resources for bankers and members of the public for more information.
- The FDIC’s website provides more information to help bankers understand deposit insurance coverage, including pass-through deposit insurance (https://www.fdic.gov/deposit/diguidebankers/fiduciary-accounts.html).
- The FDIC’s website provides more information to help consumers understand deposit insurance coverage (https://www.fdic.gov/resources/deposit-insurance/).
- The FDIC maintains a portal for submission of complaints about suspected misrepresentations regarding deposit insurance (https://ask.fdic.gov/fdicinformationandsupportcenter/s/fdicdimcomplaintform/?language=en_US).
- The FDIC’s regulations governing deposit insurance coverage are found at 12 C.F.R. Part 330 (https://www.ecfr.gov/current/title-12/chapter-III/subchapter-B/part-330).
- The FDIC’s regulation relating to false advertising, misrepresentations about insured status, and misuse of the FDIC’s name or logo is found at 12 C.F.R. Part 328 (https://www.ecfr.gov/current/title-12/chapter-III/subchapter-B/part-328).
- The Press Release and Fact Sheet: FDIC Deposit Insurance and Crypto Companies is found at https://www.fdic.gov/news/press-releases/2022/pr22058.html
- The FDIC’s Guidance For Managing Third-Party Risk is found at https://www.fdic.gov/news/financial-institution-letters/2008/fil08044a.html.
- The FDIC’s Statement on Providing Banking Services is found at https://www.fdic.gov/news/financial-institution-letters/2015/fil15005.html
For FDIC-supervised institutions: