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I saw this on their site: > FDIC INSURED ON USD $250,000 > You USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the

I saw this on their site: > 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?

ValentineC 4y ago
I think the keyword here is "cash". Other forms of assets, namely crypto, aren't protected by FDIC insurance.
- koolba 4y ago
  I wonder if this is at all related to the recent move by Coinbase to merge USDC / USD balances.
- InefficientRed 4y ago
  I have a hard time imagining a jury coming to the conclusion that this phrasing (still on their site) isn't intentionally misleading.
  - notch656a 4y ago
    USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. Seems like pretty clear fraud to me if the USDC isn't actually FDIC insured. If they meant only some of the cash (non USDC backed) was insured they should have said that.
    - jcranmer 4y ago
      > USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. 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.
      - notch656a 4y ago
        >That is not how FDIC insurance works. 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.
        jcranmer 4y ago
        > USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. 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.
  - lmm 4y ago
    Sure, but by that time there will be 0 assets to pay out and winning a judgement against them won't help you.
    - InefficientRed 4y ago
      I had prosecution in mind.
xur17 4y ago
If a user has $250k or less in USD assets on the platform I believe it does. 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.
JumpCrisscross 4y ago
> does that mean anyone with less than $250k is guaranteed their money? 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.
smoe 4y ago
Seems like a marketing spin to lure customers into a false sense of security. From the fine print in the user agreement: "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." https://www.investvoyager.com/useragreement https://www.investvoyager.com/useragreement
- iancarroll 4y ago
  If FDIC insurance is applicable, though, that should mean your cash is being held in your name with the underlying bank. It is unlikely that Voyager would have any right to those assets upon bankruptcy or insolvency -- if they do (I am no expert), that would destroy the neobank model to some extent. > 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.
  - smoe 4y ago
    I'm not an expert at all either, just mildly interested how this will play out. I don't have any money in it. There is an ongoing discussion about it on the Voyager subreddit https://www.reddit.com/r/Invest_Voyager/comments/vp8kdq/preparing_for_the_inevitable_fdic_claims/ 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.
    - jcranmer 4y ago
      > 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.
ourmandave 4y ago
Voyager Wallet You can transfer assets from an external wallet to your Voyager account/wallet. Like Coinbase, the account wallet is not yours (i.e., not your keys, not your coin). If Voyager wants to freeze your account, along with any assets in it, they can. And there isn’t much you can do about it. 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.
UkrainianJew 4y ago
>So does that mean anyone with less than $250k is guaranteed their money? Is there any legal backing? 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.
ww520 4y ago
It's a myth. See https://news.ycombinator.com/item?id=31954115 https://news.ycombinator.com/item?id=31954115
jcranmer 4y ago
What this means for anyone who is a customer is that Voyager is having an uproarious laughing session in their private conference rooms at how gullible their customers are. 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.

ValentineC 4y ago

I think the keyword here is "cash". Other forms of assets, namely crypto, aren't protected by FDIC insurance.

koolba 4y ago
I wonder if this is at all related to the recent move by Coinbase to merge USDC / USD balances.
InefficientRed 4y ago
I have a hard time imagining a jury coming to the conclusion that this phrasing (still on their site) isn't intentionally misleading.
- notch656a 4y ago
  USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. Seems like pretty clear fraud to me if the USDC isn't actually FDIC insured. If they meant only some of the cash (non USDC backed) was insured they should have said that.
  - jcranmer 4y ago
    > USDC is supposedly USD backed, so a reasonable person would presume someone who advertises FDIC insurance of cash would assume the USDC underlying USD is backed by FDIC. 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.
    - notch656a 4y ago
      >That is not how FDIC insurance works. 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.
      - jcranmer 4y ago
        > USDC is USD backed, so one would conclude you actually do "hold" USD through the USDC security. 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.
- lmm 4y ago
  Sure, but by that time there will be 0 assets to pay out and winning a judgement against them won't help you.
  - InefficientRed 4y ago
    I had prosecution in mind.

xur17 4y ago

If a user has $250k or less in USD assets on the platform I believe it does. 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.

JumpCrisscross 4y ago

> does that mean anyone with less than $250k is guaranteed their money? 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.

smoe 4y ago

Seems like a marketing spin to lure customers into a false sense of security. From the fine print in the user agreement: "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." https://www.investvoyager.com/useragreement https://www.investvoyager.com/useragreement

iancarroll 4y ago
If FDIC insurance is applicable, though, that should mean your cash is being held in your name with the underlying bank. It is unlikely that Voyager would have any right to those assets upon bankruptcy or insolvency -- if they do (I am no expert), that would destroy the neobank model to some extent. > 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.
- smoe 4y ago
  I'm not an expert at all either, just mildly interested how this will play out. I don't have any money in it. There is an ongoing discussion about it on the Voyager subreddit https://www.reddit.com/r/Invest_Voyager/comments/vp8kdq/preparing_for_the_inevitable_fdic_claims/ 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.
  - jcranmer 4y ago
    > 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.

ourmandave 4y ago

Voyager Wallet You can transfer assets from an external wallet to your Voyager account/wallet. Like Coinbase, the account wallet is not yours (i.e., not your keys, not your coin). If Voyager wants to freeze your account, along with any assets in it, they can. And there isn’t much you can do about it. 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.

UkrainianJew 4y ago

>So does that mean anyone with less than $250k is guaranteed their money? Is there any legal backing? 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.

ww520 4y ago

It's a myth. See https://news.ycombinator.com/item?id=31954115 https://news.ycombinator.com/item?id=31954115

jcranmer 4y ago

What this means for anyone who is a customer is that Voyager is having an uproarious laughing session in their private conference rooms at how gullible their customers are. 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.