> FDIC INSURED ON USD $250,000
> You USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the cash you hold with Voyager is protected.
So does that mean anyone with less than $250k is guaranteed their money? Is there any legal backing?
"Cash in the Account is insured up to $250,000 per depositor by the FDIC in the event the Bank fails if specific insurance deposit requirements are met. FDIC insurance does not protect against the failure of Voyager or any Custodian (as defined below) or malfeasance by any Voyager or Custodian employee."
> Voyager maintains an agreement with the Bank whereby the Bank provides all services associated with the movement of and holding of USD in connection with the provision of each Account. Therefore, each Customer is a customer of the Bank.
The "omnibus account" phrasing is a little vague though, but if FDIC insurance is applicable, funds have to be separated to some extent.
There is an ongoing discussion about it on the Voyager subreddit
https://www.reddit.com/r/Invest_Voyager/comments/vp8kdq/prep...
Some people there say they have called the FDIC, but the response they have gotten is that the insurance only kicks in if the Metropolitan Commercial Bank fails.
I have no idea what happens to the customer accounts at the bank in case of a Voyager bankruptcy. E.g. if they can be used to cover voyagers debt or have to be handed over to the customers.
Most likely, the customers are unsecured creditors to Voyager, which means they're at the back of line for getting claims on those assets.
"Metropolitan Commercial Bank maintains an omnibus account specifically designated for the benefit of Voyager customers. [...] Voyager is responsible for maintaining records to determine the ownership and amount of each of its customer’s funds on deposit in the omnibus account."
https://www.mcbankny.com/fdic-coverage-available-to-voyager-...
Unless I misunderstand, there seems to be no account separation whatsoever on the side of the bank and no "each Customer is a customer of the Bank"
I’ve noticed a lot of crypto companies being sneaky with this. What that means is if Metropolitan Commercial Bank goes under, Voyager’s cash is protected. It does nothing to protect cash you’ve entrusted to Voyager if Voyager goes under.
The FDIC insurance means that Voyager is guaranteed at minimum $250k of its bank account should Metropolitan Commercial Bank. That's $250k for the entire company, not per customer of Voyager [1]--if Voyager held $25m in cash in that account, that's only 1% of its cash accounts that are insured. Of course, how much of an impact that has depends on how much of its assets Voyager actually holds in cash which is likely very little.
But as a customer? You have no protection whatsoever. This reassurance is basically saying "we're protected in case of emergency; you're not."
[1] It's possible that Voyager is actually the custodian of an account in your name at Metropolitan Commercial Bank, but I think that would require your explicit signature to set up, so I doubt that it's actually in play here.
No, it means that up to $250K of Voyager's USD is protected by FDIC in case their bank flops. That is the combined limit shared between ALL of Voyager's customers.
It doesn't protect from Voyager telling you that they sold your 1 BTC for $20K USD as you requested, while actually still sitting on 1 BTC, hoping to sell it tomorrow for $30K and pocket the $10K difference.
Similar to "not your keys - not your bitcoins", no written agreement with a regulated bank - not your dollars.
For most of these sites, users convert deposits into stablecoins (USDC, etc) since they can typically earn interest on this, and this is not covered under FDIC.
Other forms of assets, namely crypto, aren't protected by FDIC insurance.
That is not how FDIC insurance works. If you don't hold USD, you don't enjoy any FDIC insurance, period. Not your USD, not your insurance.
> If they meant only some of the cash (non USDC backed) was insured they should have said that.
Judging from the text at the top of this thread, this is precisely what they said, so it's not fradulent. At no point are they saying that they offer accounts protected by FDIC insurance--instead, they're saying that their USD reserves are in FDIC-insured accounts. So no misrepresentation going on.
Agreed but I'd say this was misrepresented as they say USD is backed by FDIC. See below.
>If you don't hold USD, you don't enjoy any FDIC insurance, period. Not your USD, not your insurance.
USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. Thus you are tricked into believing you have FDIC insurance on the USD secured by the USDC. "period."
>Judging from the text at the top of this thread, this is precisely what they said, so it's not fradulent.
What was said on the thread is that USD is FDIC backed. USDC is secured by USD, so one would reasonably conclude their USD underlying the USDC is FDIC insured (in fact it is not).
>At no point are they saying that they offer accounts protected by FDIC insurance--instead, they're saying that their USD reserves are in FDIC-insured accounts. So no misrepresentation going on.
But the USD reserves of the USDC __aren't_ completely FDIC insured so there is misrepresentation going on.
It's pretty evident to me here there was a slight of hand here that was intentional. The wording was intentional chosen to weasel out of the FDIC backing while leading the customer on to believe it is FDIC backed. A pretty common reasonable interpretation of the customer I think is to say "I own USDC which has underlying USD, and Voyager says USD itself is FDIC backed thus the full value of the USDC is insured." If that wasn't the case it seems pretty pointless to couple their twitter advertisements that advertise FDIC insurance and then goad you on to deposit USDC. The coupling was definitely intentional.
I mean, I can see the thought pattern behind this, but it's wrong. No court will uphold this interpretation. You don't hold the USD, you hold USDC, so absent the USDC financial instrument itself having contractual obligations (which it doesn't), the underlying assets matters not one whit.
> It's pretty evident to me here there was a slight of hand here that was intentional. The wording was intentional chosen to weasel out of the FDIC backing while leading the customer on to believe it is FDIC backed.
Oh, I'm certain the misleading was intentional. But that doesn't mean it was fradulent. At no point did they make a false statement--instead, you made an incorrect inference. You might have a cognizable false advertising claim, but nothing I've seen would lead me to conclude that a fraud claim could be upheld.
No, you're fucked. It used to take up to 2 days to transfer it out of Voyager, before everyone (not a whale) was completely fucked.