The FDIC Has Had It With Crypto Companies Claiming It Insures Them
Published on July 30, 2022 at 02:52AM
After admonishing crypto lender Voyager Digital for "false and misleading" statements on the subject, the FDIC said banks must ensure that crypto firms they partner with are clear about whether customer deposits are insured. From a report: In industry guidance published Friday, the Federal Deposit Insurance Corp. said insured banks should monitor that crypto firms they work with do not misrepresent the availability of deposit insurance and "should take appropriate action to address such misrepresentations." The notice comes a day after the FDIC and Federal Reserve demanded Voyager Digital correct what it called misrepresentations that suggested some of its customers were covered by federal insurance if the firm collapsed. When Voyager filed for bankruptcy earlier this month, its banking partner, Metropolitan Commercial Bank, issued a statement clarifying that FDIC insurance is available "only to protect against the failure of Metropolitan Commercial Bank," not Voyager. Metropolitan is holding about $350 million in customer funds, which Voyager has told customers will be released after the bank undergoes a fraud prevention process. Metropolitan is far from the only bank holding deposits on behalf of crypto companies, and now the FDIC wants to ensure customers are not further confused about how, or if, their assets are covered.
Published on July 30, 2022 at 02:52AM
After admonishing crypto lender Voyager Digital for "false and misleading" statements on the subject, the FDIC said banks must ensure that crypto firms they partner with are clear about whether customer deposits are insured. From a report: In industry guidance published Friday, the Federal Deposit Insurance Corp. said insured banks should monitor that crypto firms they work with do not misrepresent the availability of deposit insurance and "should take appropriate action to address such misrepresentations." The notice comes a day after the FDIC and Federal Reserve demanded Voyager Digital correct what it called misrepresentations that suggested some of its customers were covered by federal insurance if the firm collapsed. When Voyager filed for bankruptcy earlier this month, its banking partner, Metropolitan Commercial Bank, issued a statement clarifying that FDIC insurance is available "only to protect against the failure of Metropolitan Commercial Bank," not Voyager. Metropolitan is holding about $350 million in customer funds, which Voyager has told customers will be released after the bank undergoes a fraud prevention process. Metropolitan is far from the only bank holding deposits on behalf of crypto companies, and now the FDIC wants to ensure customers are not further confused about how, or if, their assets are covered.
Read more of this story at Slashdot.
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