FDIC lacks ‘clear procedures’ for crypto-related risks, report says

The Office of the Inspector General made some recommendations to update the FDIC’s approach to crypto activities by supervised institutions

article-image

Mark Van Scyoc/Shutterstock modified by Blockworks

share

The Office of the Inspector General of the Federal Deposit Insurance Corporation released a report on the FDIC’s crypto risk strategies Wednesday. 

The Office of the Inspector General made two recommendations to the FDIC, including a process for supervising crypto activities at regulated institutions.

According to a press release, the OIG made the recommendations “based on evidence obtained during [their] evaluation.” It said “the FDIC’s lack of clear procedures causes uncertainty for supervised institutions in determining the appropriate actions to take.”

The OIG recommends that the FDIC needs to assess the potential risks of crypto because, without “effective guidance,” the FDIC or the institutions under its umbrella “may not take appropriate actions to address the most significant risks posed by crypto assets.”

“Specifically, the FDIC has not yet completed a risk assessment to determine whether the Agency can sufficiently address crypto asset-related risks through actions such as issuing guidance to supervised institutions,” the report said.

Further, the OIG warned that a lack of review process could make it seem as though the supervisory body is not being “supportive” of institutions currently engaging or planning to engage with crypto.

The FDIC agreed with the report’s recommendations and “plans to complete corrective actions for these recommendations” by the end of January.

The report also calls out crypto companies making “misrepresentations” about deposits being backed by the FDIC. As an example, it referred to an unnamed crypto company.

“In 2022, a cryptocurrency company filed for bankruptcy. This company had been misrepresenting to its customers for over a year that the funds it held for customers were insured by the FDIC,” the report said.

While there were a number of crypto companies that declared bankruptcy in 2022, the Federal Trade Commission most recently targeted bankrupt lender Voyager for its deceptive claims around FDIC insurance. 

The company was allegedly “well aware” that the deposits were not backed by the FDIC, according to a FTC suit.

Additionally, Binance updated its terms of service to say that accounts are “not eligible” for insurance protections after it said — in an email to customers and seen by Blockworks — that it had been given “guidance” by the FDIC.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Ethena Labs is leaping from its flagship synthetic dollar, USDe, to a full product suite—USDtb, iUSDe, and the Arbitrum-based Converge Chain—designed to marry crypto-native yields with TradFi-grade compliance. Our analysis shows how expanding into CME, ETF options, and tokenized Treasuries could lift protocol revenue from sub-$500 million in a bear case to several billion dollars if favorable regulation and institutional adoption align.

article-image

The L1’s Interwoven Stack is the most opinionated tech stack yet

article-image

Bitcoin is still rising, 11 years after the documentary film The Rise and Rise of Bitcoin

article-image

Arch Labs CEO told Blockworks that the team plans to launch a native token, but declined to give details

article-image

CEO Mike Silagadze tells Blockworks that the US is “open for business” and why its DeFi bank offering is the first of many

article-image

Doing one thing well and leaving everything else out is often what disruptive technologies do best