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There's a myth that Voyager is FDIC insured. It's pure marketing. Voyager has an omnibus account with the Metropolitan Commercial Bank where Voyager's custome
by ww520 4y ago
There's a myth that Voyager is FDIC insured. It's pure marketing.
Voyager has an omnibus account with the Metropolitan Commercial Bank where Voyager's customers deposit their money. Voyager acts as the money manager of the omnibus account and has absolute control over the money.
Metropolitan is a member of FDIC and is FDIC insured. In the case of the Metropolitan bank failing, the FDIC insurance kicks in to cover any loss of the omnibus account upto 250K. However, Voyager is NOT a member of FDIC and is not FDIC insured. In the case of Voyager failing, the money is gone. FDIC won't be involved as Metropolitan is still fine.
Voyager customers hoping FDIC coming in to cover their loss are going to have a rude awakening.
Edit: A simple analogy is that your parents and you open a shared account with a bank. Your parents lose all the money from the account. FDIC is not going to cover any of the loss since the bank is fine.
- notch656a 4y agoWhat the hell? Is there no penalty for advertising as being FDIC insured when client deposits are not? Plain as day I checked their tweets and they made a statement about FDIC insurance and the next sentence was telling you to start your crypto investment.
- ww520 4y agoIMO any non-FDIC entity advertising being FDIC insured is borderlining on fraudulent advertisement.
- qeternity 4y agoI mean technically they are FDIC insured…it’s just their “depositors” aren’t.
- oldgradstudent 4y agohttps://www.consumerfinance.gov/compliance/circulars/circular-2022-02-deception-representations-involving-the-fdics-name-or-logo-or-deposit-insurance/ https://www.consumerfinance.gov/compliance/circulars/circula...
- deleted 4y ago[deleted]
- hn_throwaway_99 4y agoI'd be interested if someone can comment with more information. Here are the details from Voyager's legal docs: > Customer understands and acknowledges that Customer may arrange to deposit United States Dollars (“USD” or “Cash”) into the Account. Cash deposited into the Customer’s Account is maintained in an omnibus account at Metropolitan Commercial Bank (the “Bank”), which is a member of the Federal Deposit Insurance Corporation (“FDIC”). 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. All U.S. regulatory obligations associated with the movement of, and holding of, USD in connection with each Account are the responsibility of the Bank. For purposes of clarity, any services pertaining to the movement of, and holding of, USD are not provided by Voyager or its Affiliates. 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. My reading of that, then, is that if you have USD cash in that account, then Voyager can NOT restrict your withdrawal of that cash, due to this line "All U.S. regulatory obligations associated with the movement of, and holding of, USD in connection with each Account are the responsibility of the Bank." They are clearly saying here that, basically "For purposes of your cash, you are an individual customer of the Bank (which is FDIC insured), and the Bank is responsible for following Banking regulations". AFAIK banks are not allowed to just restrict withdrawals as Voyager has done. So it seems like your crypto could all be tits up, but your cash should be FDIC insured.
- ww520 4y agoYour cash is FDIC insured in regarding to Metropolitan failure. Your cash is not FDIC insured in regarding to Voyager failure. Omnibus account is a shared account which Voyager has absolute control. See their language below where Metropolitan grants them the right on "movement of and holding of USD," i.e. they can move the money as they see fit. "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." As for Voyager customers withdrawing the money from Metropolitan, they can try. Curious to see how far they get.
- spyder 4y agoHm.. interesting. In their medium article linked below they say the funds are safe even in case of the failure of the company not just their bank partner, but on their website in the same text the "company failure" is not there. (and even just saying "company" in the article is a little vague because they don't say which company): "Through our strategic relationships with our banking partners, all customers’ USD held with Voyager is now FDIC insured. That means that in the rare event your USD funds are compromised due to the _company_ or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000)." https://invest-voyager.medium.com/usd-held-with-voyager-is-now-fdic-insured-5165343aa554 https://invest-voyager.medium.com/usd-held-with-voyager-is-n... https://www.investvoyager.com/blog/voyager-is-now-fdic-insured/ https://www.investvoyager.com/blog/voyager-is-now-fdic-insur...
- ww520 4y agoThey were misrepresenting their FDIC status if they were claiming FDIC covering their company's failure. They might be cleaning their language to avoid legal problems.
- tim333 4y agoThis article (https://amycastor.com/2022/07/02/who-had-voyager-digital-next-in-the-defi-dead-pool/ https://amycastor.com/2022/07/02/who-had-voyager-digital-nex...) says they'd convert any USD you sent them to USDC which are not insured.
- stefan_ 4y agoMaybe that myth got started when they wrote a blog post to that effect: https://invest-voyager.medium.com/usd-held-with-voyager-is-now-fdic-insured-5165343aa554 https://invest-voyager.medium.com/usd-held-with-voyager-is-n...
- iends 4y agoJust two weeks ago they had the following in a blog post: > This is also a good time to remind everyone that USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured. The cash you hold with Voyager is protected up to $250,000–which means it’s as safe with us as at a bank. They also said: > Through our strategic relationships with our banking partners, all customers’ USD held with Voyager is now FDIC insured. That means that in the rare event your USD funds are compromised due to the company or our banking partner’s failure, you are guaranteed a full reimbursement (up to $250,000). The "That means that in the rare event your USD funds are compromised due to the company" is what is confusing people.
- ww520 4y agoThey are misrepresenting their FDIC status if they claim FDIC covers their company's failure.
- oldgradstudent 4y agoThat's misleading marketing, and might even be a federal crime. Their terms of service say clearly: >FDIC insurance does not protect against the failure of Voyager https://www.investvoyager.com/useragreement/ https://www.investvoyager.com/useragreement/
- sytelus 4y agoI am pretty certain people there will end up in prison for making these kind of false claims.