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Home Blog cryptocurrency insurance, deposit insurance,
Article by Yunis
13 August 2022 (Updated 22 June 2024)

We witness various platforms going bankrupt in the second quarter of 2022. Your assets' safety is essential. Make sure your cash deposits will be returned even if the crypto exchange platform fails.

Your cash deposits in locally regulated banks are safe up to a certain limit. Almost all developed countries have such a system to protect retail investors.
Are cryptocurrency deposits insured? What are FDIC, FSCS, and EDIS?
  • Retail investors' cash deposits are protected up to a limit.
  • There is no state-sponsored protection for crypto assets.
  • FDIC, FSCS, and EDIS are the financial ombudsman services to establish trust among retail investors.
  • Binance, Coinbase, FTX have local app for U.S. and cash deposits are FDIC covered.

Are cryptocurrency deposits insured? 

Cryptocurrencies are like bonds, stocks, and mutual funds and are not subject to state-sponsored deposit insurance like FDIC, FSCS, or EDIS. Some cryptocurrency exchange platforms accept fiat currencies like U.S. Dollar, British Pound, or Euro deposits and hold required licences to provide state-supported insurance for cash deposits. This means that if a crypto exchange platform fails to return fiat currency deposits to customers, FDIC, FSCS, or EDIS will do it.

Your crypto assets are not protected by the state-sponsored programme. Different crypto platforms offer different custody, insurance, and coverage plans for their customers. Before trusting your money to a platform, do your own research and learn what protectios are provided. 

What is FDIC insurance? 

FDIC is the abbreviation for Federal Deposit Insurance Corporation. FDIC is a federal program that provides insurance for cash deposits in banks in the U.S. When you have a dollar deposit in an FDIC-insured bank, your deposit up to $250,000 is insured by the government. This programme was first created during the Great Depression to calm depositors to rush to withdraw their deposits from banks.

FDIC insurance covers your losses and reimburses losses up to the programme limit. Only US Dollar currency in savings accounts with licenced U.S. banks are eligible for FDIC insurance. If a bank fails to return deposits to depositors, FDIC will reimburse the losses and return deposits to depositors from its funds.

What is FSCS Insurance?

FSCS, short for Financial Services Compensation Scheme, is a programme like the American FDIC to protect depositors. FSCS is similar to FDIC and promises to reimburse funds up to a certain limit to depositors if a bank fails. FSCS programme covers Pound deposits up to £85,000 per person. You can read important details about cryptocurrency investment risks from the FSCS’ official website.

European Deposit Insurance Scheme (EDIS)

European Commission proposed to create EDIS to provide insurance for retail savings accounts in entire Europe. EDIS was designed to develop a common system for European Union member countries. Individual deposits in banks are insured for up to €100 000 per person.

Platforms offer insurance for cash deposits.


Binance is the leading cryptocurrency exchange platform and operates worldwide. Binance offers its customers to use its global app or local app. Local versions accept local currencies and comply with local regulations. Binance US is the American version of the Binance trading and exchange platform. You need to complete KYC to sign up, and you can directly deposit U.S. dollars. U.S. Dollar deposits within the Binance US platform are FDIC insured.

Binance doesn’t offer the same in other countries, like Europe and England. Your fiat deposits to the Binance platform are not subject to any financial ombudsman service. Cryptocurrency trades and exchanges bear the risk of losing significant amounts and are not insured.


Coinbase follows the same strategy as Binance and holds customers’ cash deposits in regulated banks. According to Coinbase’s website, the funds from customers are invested in liquid U.S. Treasuries. The local financial ombudsman service provides coverage for customer deposits held in banks.r


FTX has a U.S. version along with its global platform. Your U.S. Dollar deposits are covered under FDIC in the FTX U.S. platform. FTX platform also offers insurance for funds held in hot and cold wallets. Funds held in hot wallets are covered with crime insurance against theft, fraud, loss in premises, and loss in transit.

Important Message Definda does not provide any financial advice. All information is provided for research purposes only. DeFi is a rapidly evolving industry. Most businesses in the sector are very young and it is possible that some of them could go out of business in the future. Such an event could result in the loss of your investment. You should do your own research or consult a financial advisor before investing any money. Please read and satisfy yourself with our terms before continuing to use our website. We offer a free impartial comparison service of savings, loans and other DeFi products. We may receive a small commission from some of the companies listed, but this never influences our rankings. If you spot any errors in the information listed then please contact us at
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