Voyager caught lying! FDIC: Deposit insurance does not apply to crypto companies, please remove false information

Cryptocurrency broker Voyager, which has been severely impacted by the bankruptcy of Three Arrows Capital, announced its bankruptcy at the beginning of this month. The company has always claimed that users' USD deposits are insured by the FDIC, ensuring compensation even in the event of the company's bankruptcy. However, the FDIC recently issued public letters and situation statements refuting Voyager's claims and demanding the removal of related content.

FDIC Insurance Suspected

Voyager stated that as early as 2019, it had obtained FDIC insurance for US dollar deposits, meaning that the US dollars held by users in Voyager are all insured by the FDIC. In the event of bankruptcy, users can receive compensation of up to $250,000.

According to a previous announcement, it was confirmed that user "US dollar" deposits in Voyager are within the coverage of insurance. CEO Stephen Ehrlich also mentioned in his tweet that "US dollar depositors" will be able to retrieve their funds after reconciliation with Metropolitan Commercial Bank.

FDIC Denies Voyager's Claims

However, the FDIC and the Federal Reserve Board issued a joint cease and desist letter on Thursday, refuting Voyager's claims of insured deposits.

The letter stated that Voyager had repeatedly claimed on its website, mobile app, and social media that it was FDIC-insured and that users investing in the Voyager crypto platform were within the FDIC insurance coverage, ensuring insurance for customers in the event of Voyager's collapse.

However, these claims were found to be false and misleading, causing users to deposit funds in the Voyager platform that they cannot immediately access.

In response, the FDIC has demanded that Voyager remove all such content to prevent further deception of users with false information.

FDIC Issues Situation Clarification

Following the issuance of the joint cease and desist letter, the FDIC released a fact sheet the next day, clarifying the relationship between FDIC deposit insurance and crypto companies.

The document stated that under federal law, the FDIC only provides insurance for deposits held in insured banks and savings associations, and only in the unlikely event of a bank failure, with the coverage applicable to deposits held when the bank fails. The FDIC does not insure assets issued by non-bank companies.

Non-bank companies include cryptocurrency custodians, exchanges, broker-dealers, wallet providers, and pure online banks (neobanks).

Furthermore, FDIC deposit insurance does not apply to stocks, bonds, financial products, mutual funds, other types of securities, commodities, or cryptocurrencies. It also does not protect against losses due to theft or fraud, which would need to be pursued through other legal means.