Coinbase and Circle, two leading cryptocurrency companies, have cited the Federal Deposit Insurance Corporation (FDIC) to ensure fund recovery for their customers. The FDIC is an independent agency that provides deposit insurance to protect customers’ funds in case of bank failures. By partnering with FDIC-insured banks, Coinbase and Circle can offer additional protection to their customers’ funds, giving them greater peace of mind. With cryptocurrency still a relatively new and unpredictable industry, such measures are essential to building trust and credibility with investors.
The traditional banking system is experiencing a major crisis, with Signature Bank and Silicon Valley Bank among the worst hit. Many customers are concerned about the safety of their funds. However, Coinbase has reassured its users that their funds will be recovered from Signature Bank, which reportedly holds $240 million in corporate cash. Despite the collapse of Silvergate Bank, Coinbase is expected to recover funds with the assistance of the FDIC, which has announced a risk exception for all affected banks. Meanwhile, panic has been sparked by Circle’s financial issues, with $3.3 billion stuck at Silicon ValleyBank. Customers have been converting their holdings of USD Coin due to fear that the token will lose value. However, Coinbase has stated that all client funds will remain safe and accessible. While some investors are exploring options to recover lost funds, the timeline for recovery remains uncertain.