Crypto entities don’t cowl by FDIC insurance.
The U.S. Federal Deposit Insurance Corporation has issued a broad warning to bankers to maintain control of their cryptocurrency partners. They have also demanded retract its assertions that consumers’ cash would receive government protection.
This week, the FDIC and Federal Reserve accused Voyager CEO stephen ehrlich stephen ehrlich Co-Founder and CEO at voyager digital Stephen Ehrlich is the Co-Founder and Chief Executive Officer of Voyager Digital. He founded the platform in 2018 along with Philip Eytan and Gaspard de Dreuzy, intending to secure financial freedom by providing public trading, registering, and providing an advanced fraud protection platform, and has served at the helm since its inception and operations.
Stephen is a brokerage and market structure veteran who founded a retail broker-dealer platform, Lightspeed Financial, where he was responsible for eight significant acquisitions. Whereas in the past, Stephen served as the CEO of E*TRADE Professional Trading LLC, the professional trading arm of the platform, Financial was acquired by Lightspeed in 2006. Stephen has spent seven years holding the position of CEO at Honos Financial, LLC, which is a diversified financial services and financial technology holding firm. EntrepreneurManagement Followers : 0 View profile of deceiving consumers about the safeguards on their assets by stating that they would be protected by deposit insurance in the case of Voyager’s failure.
The Voyager customers are currently fighting to get their money back while the business navigates bankruptcy.
Deposit products offered by insured banks, such as checking and savings accounts, are covered by the FDIC deposit insurance. However, stocks, bonds, money market mutual funds, securities, commodities, and digital assets are examples of non-deposit items that are not covered by insurance, as clarified by the Corporation.
The Ongoing Dispute
The US regulators previously issued an order to ailing crypto lender Voyager, ordering it to stop misrepresenting to its clients that their funds were insured by the FDIC and protected by the US government just because it held accounts at Metropolitan Commercial Bank in New York.
On Thursday, the FDIC and FED released the following statements to clarify:
Voyager has made a number of claims on the internet through its website, mobile app, and social media accounts, claiming or implying that:
(1) The very first claim which went against Voyager is FDIC-insured
(2) Customers who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, held by, on, or with Voyager
(3) The FDIC would protect customers in the event that Voyager fails
By doing so, the Corporation has provided valuable information to Voyager’s customers on who is really responsible for resolving the crisis. Further developments are awaited.