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2 mins read

April 19, 2023

Is your cash on US crypto exchanges FDIC insured?

Know more about FDIC insurance on US crypto exchanges/platforms

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New crypto investors and traders rely on centralized crypto exchanges like Coinbase, Gemini, etc., or crypto platforms like Nexo to start their crypto journey, from depositing their cash to buying crypto.

Many users use these exchanges/platforms to store both crypto and cash for regular purchases or dollar-cost averaging. However, cash on these crypto exchanges and platforms is not as safe as on Juno’s checking account. Crypto exchanges and platforms are not licensed banks. They partner with banking institutions to hold users’ cash deposits.

As we have seen with FTX and Signature Bank failure, there are 2 types of bankruptcy risks associated with your cash:

1. Crypto exchange or platform going bankrupt (FTX or BlockFi) - Where the crypto platform/exchange is bankrupt due to business failure, and its associated banking partners are unaffected.

2. Banking partner who holds users’ cash deposits going bankrupt (Signature Bank) - The banking partner is bankrupt due to its business failure, but the crypto exchange or platform is unaffected.

For Crypto Exchanges - Coinbase, Binance US, Gemini

Note - In case of the banking partner's bankruptcy, crypto deposits are not insured on crypto exchanges.

Recently for Coinbase, when Signature Bank, one of the Coinbase banking partners, collapsed, Coinbase communicated and assured its users that all users' funds were safe and had a pass-through FDIC insurance policy with the banking partner. Here is the thread from the official coinbase account.

For Crypto Platforms - Crypto. com and Nexo

Why Juno is Different?

Why FDIC is important?

Over the last several months, the US Fed has continued to increase its interest rates to combat inflation. The steep increase in interest rates in such a short period was dangerous to banks, as these banks' primary lending business was severally affected. Hence, depositors rely only on keeping their cash in FDIC-insured bank accounts, as no depositor has lost a single dollar of FDIC-insured funds due to bank failure.

Thus, Juno offers you the best solution and protects your cash during different bankruptcy risks. And you can also earn a 5% bonus on your cash deposits (banking services provided by Evolve Bank & Trust).

Reference:

QUICK LINKS

How to close exchange accounts

Claim FDIC insurance

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Juno (CapitalJ Inc.) is a financial technology company, not a bank. Banking services provided by Evolve Bank and Trust, Members FDIC. The Juno card is issued by Evolve Bank and Trust, Member FDIC, pursuant to license by Mastercard International.

Digital Assets are highly speculative in nature, involve a high degree of risk and can rapidly and significantly decrease in value. It is reasonably possible for the value of Digital Assets to decrease to zero or near zero.

Digital Assets held in your Juno Account are not protected by FDIC insurance or any other government-backed or third party insurance.

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