Federal Trade Commission
If your bank is FDIC insured, you’re protected up to $250,000 if the bank fails. But what about the funds you deposit with a crypto-based financial services provider? Nope. That money isn’t FDIC insured or protected if the crypto company goes under. But that’s exactly what one crypto company promised.
According to the FTC, Voyager Digital LLC, a crypto-based financial services provider, misled people with claims that money deposited through a “Voyager App” was FDIC insured if anything went wrong. The FTC says that Voyager advertised itself as a safe and secure bank alternative for people to store money. Voyager’s messaging also encouraged people to “ditch” their regular bank and use Voyager’s debit card instead.
Despite its claims, Voyager was never an FDIC insured bank. And FDIC insurance doesn’t cover crypto (also called crypto assets.) So, when Voyager eventually failed and filed for bankruptcy, people with accounts were locked out and lost money.
In a proposed settlement announced today, the Voyager and its affiliated companies have agreed to be permanently banned from offering, marketing, or promoting any products or service that could be used to deposit, exchange, invest, or withdraw any assets.
Protect yourself from crypto-related scams
Know that crypto deposits are not FDIC insured, period. If something happens, the government may not have an obligation to step in and help get your money back.
Research the crypto company. Search online for the company name, plus “review,” “scam,” or “complaint” to see what people say.
Don’t trust companies that make big promises or guarantees. Only scammers promise “no risk,” guarantee high returns, or promise “safe” places to deposit your money.
Check out ftc.gov/cryptocurrency to learn more. Spot a crypto fraud or scam? Tell us at ReportFraud.ftc.gov.