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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteYour crypto is not automatically protected if the company holding it fails. FDIC insurance covers eligible deposits at insured banks—not cryptocurrency or a nonbank exchange or custodian. If a custodian goes bankrupt, access to crypto and the chance of recovery can depend on the custody agreement, asset records, segregation practices, applicable law and decisions made in the insolvency proceeding.
Is crypto FDIC insured?
No. FDIC insurance protects eligible deposits at insured banks, subject to applicable limits and account-ownership rules. It does not insure cryptocurrency, and it does not protect customers against the default, insolvency or bankruptcy of a nonbank crypto custodian, exchange, broker, wallet provider or neobank. The FDIC states this directly in its July 28, 2022 fact sheet.
The FDIC has described deposit coverage as up to at least $250,000 per depositor at an insured bank, subject to ownership-category rules. That is a deposit-insurance limit, not a crypto-insurance amount. It does not mean every account receives a separate $250,000 of coverage or that crypto held through an intermediary is protected. See the FDIC’s 2022 explanation of deposit insurance and crypto companies.
What if a crypto exchange or custodian goes bankrupt?
Customers may face a suspension of withdrawals while a court, receiver or bankruptcy trustee determines what assets the company holds and who has rights to them. Having a positive balance displayed in an app does not, by itself, settle whether particular crypto belongs to the customer or forms part of the company’s estate.
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U.S. bankruptcy law generally includes a debtor’s legal or equitable interests in property in the bankruptcy estate. Applying that rule to crypto held under a particular custody arrangement can be fact-specific. A 2026 SEC-filed disclosure warns that contractual protections and customer rights to custodial digital assets remain relatively untested in bankruptcy or receivership. A court might treat customer assets as estate property, potentially leaving customers as general unsecured creditors exposed to loss or a reduced recovery. Even if assets are excluded from the estate, an automatic stay or related proceedings can delay or prevent their return. This is a material risk, not a prediction that every custodian’s customers will lose their assets. SEC-filed disclosure, 2026.
Does holding crypto at a bank make it protected?
No. A bank’s custody of crypto is different from holding an eligible deposit account there. A bank may hold crypto on a customer’s behalf, but that arrangement does not turn the crypto into an FDIC-insured deposit. Likewise, if a nonbank service says it uses or partners with a bank, that claim alone does not establish that a customer’s crypto—or even the customer’s cash balance—is an insured deposit at that institution.
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For any cash balance, identify the actual bank, the legal depositor and the account type, and confirm whether the money is held as an eligible deposit at an insured institution. Do not assume that deposit insurance follows crypto through an exchange or custody service.
Federal banking agencies’ July 14, 2025 joint statement describes existing risk-management considerations for banks holding crypto for customers and says it creates no new supervisory expectations. The OCC’s 2025 announcement says national banks and federal savings associations may conduct certain crypto custody and execution activities, including through outsourcing, subject to safe-and-sound operation, applicable law and appropriate third-party risk management. Regulatory permission or oversight does not make a custody balance an insured deposit.
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What determines whether customers can recover crypto?
No single contract term or operational practice guarantees a particular result. These details can inform the legal analysis and help establish a claim, but courts and receivers may still need to resolve disputed rights:
- Legal entity and jurisdiction: Identify the company named as custodian, where it is organized and which insolvency system applies. A brand name may not identify the entity that owes the customer obligations.
- Asset and account type: Establish whether the balance is an insured bank deposit, crypto held in custody, a security entitlement or a contractual claim against an intermediary.
- Ownership and segregation: Read what the agreement says about customer ownership, separate wallets or accounts, commingling, liens and setoff. Review whether the company may lend or rehypothecate assets.
- Operational control: Determine who controls the private keys, whether customers can withdraw directly and whether sub-custodians are used. Contractual rights may not prevent an operational suspension.
- Evidence and recovery process: Check what records a customer must provide to assert a claim and how account access or keys would be restored.
What should you check before choosing a custody arrangement?
- Find the legal entity. Read the agreement to identify the actual custodian and whether it is an insured bank or a nonbank provider.
- Separate cash from crypto. Treat each balance according to its legal form; do not infer FDIC coverage from a logo, partnership or “bank-backed” wording.
- Read the custody terms. Look for language on ownership, segregation, lending, rehypothecation, liens, setoff and third-party custody.
- Keep your own records. Save statements, transaction histories and copies of the applicable agreements so you can document balances and terms.
- Weigh self-custody carefully. A hardware wallet is a physical tool for managing private keys; it does not store the crypto itself. The assets remain on-chain, and access depends on the keys and recovery backups. Self-custody avoids reliance on a custodian for key control, but creates responsibility for protecting keys and recovery information. It is not insurance against loss and cannot resolve a claim already tied up in an insolvency. See this hardware-wallet explanation.
This guidance describes U.S. deposit-insurance, banking and insolvency concepts. It cannot determine an individual customer’s outcome; the contract, entity structure, bank relationship, asset records and facts of a failure matter. Rules outside the United States may differ.
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