FDIC Probing Voyager Claims It Was Insured by Regulator

The Canadian-based crypto exchange filed for bankruptcy earlier this week.

AccessTimeIconJul 7, 2022 at 6:20 p.m. UTC
Updated Jul 7, 2022 at 6:41 p.m. UTC

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

The Federal Deposit Insurance Corporation (FDIC) is taking a look at claims by crypto broker Voyager that its customer accounts were protected by that U.S. agency in the event of a company collapse, an agency spokesperson confirmed.

Voyager filed for bankruptcy protection earlier this week, revealing that it had somewhere between $1 billion and $10 billion in both assets and liabilities.

The FDIC – a federal regulator tasked with overseeing bank stability in the U.S. – protects customers from losing their funds in the event of a bank collapse, insuring up to $250,000 per account. This insurance, however, usually only applies to an actual bank failure, not upon failure of the bank's client, i.e., Voyager's collapse wouldn't necessarily trigger an FDIC backstop.

The Wall Street Journal first reported the news Thursday.

In its previous advertising, Voyager appeared to be saying that its own customers would be protected by the FDIC, pointing to its accounts at New York-based Metropolitan Commercial Bank. For its part, this week Metropolitan put up a statement on its website refuting the Voyager claim.

"FDIC insurance coverage is available only to protect against the failure of Metropolitan Commercial Bank," the statement said. "FDIC insurance does not protect against the failure of Voyager, any act or omission of Voyager or its employees, or the loss in value of cryptocurrency or other assets."

Voyager held an omnibus account at the bank for U.S. dollars, the statement added.

An FDIC spokesperson told CoinDesk Voyager is not a bank or savings association, and therefore not qualified for FDIC insurance. Voyager customers are not protected against the crypto broker's default, bankruptcy, withdrawal suspension or if its assets lose value. Voyager's customers could reach out to the FDIC if they have further questions, the spokesperson added.

Voyager, in announcing its bankruptcy filing, valued current holdings at Metropolitan to be about $350 million (it has another $110 million in cash on hand, as well as over $1 billion in crypto). Voyager said in its filing that it had moved to check that customer deposits at Metropolitan would be segregated from other Voyager assets in a bankruptcy and protected from creditors.

UPDATE (July 7, 2022, 18:35 UTC): Adds additional information and FDIC spokesperson comments.

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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

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