“…some exchanges do provide protections. Coinbase, for instance, holds cash in U.S. banks so that users’ stored values are protected by FDIC insurance.”
That’s not how FDIC insurance works. Deposits are ensured up to $250,000 in case the bank holding the deposit fails. I’ve seen several stories in which crypto companies are claiming their funds are federally insured, but that’s true only if the bank holding them fails not the company that deposited the funds. Unless I’m totally missing something here….
I think you're right, I should've added more to this. I think that there's a lot of dancing being done to make users feel better, but as you're pointing out, there's probably limited, if any, protection. These exchanges aren't banks, after all. I appreciate the feedback, Randy!
Yes, I keep seeing this “we keep your money in a bank” line and it strikes me as a misdirection play. They’re trying to distract gullible users by implying there’s protection that isn’t really there — without actually lying.
Yes, it’s technically true your funds are FDIC insured, but that doesn’t help you if we (crypto company) goes belly up. It’s like saying “we have offices in a building with a roof.” The roof will give your funds just as much protection as FDIC insurance.
I live outside of Boston and the spend large amounts of money to save money over time is playing out in regards to the public transportation system. The whole thing is broken and needs to be scrapped and rebuilt from the ground up. Of course, what will continue to happen is they will throw hundreds of millions to try to patch together a fix on infrastructure from the early 1900s.
“…some exchanges do provide protections. Coinbase, for instance, holds cash in U.S. banks so that users’ stored values are protected by FDIC insurance.”
That’s not how FDIC insurance works. Deposits are ensured up to $250,000 in case the bank holding the deposit fails. I’ve seen several stories in which crypto companies are claiming their funds are federally insured, but that’s true only if the bank holding them fails not the company that deposited the funds. Unless I’m totally missing something here….
I think you're right, I should've added more to this. I think that there's a lot of dancing being done to make users feel better, but as you're pointing out, there's probably limited, if any, protection. These exchanges aren't banks, after all. I appreciate the feedback, Randy!
Yes, I keep seeing this “we keep your money in a bank” line and it strikes me as a misdirection play. They’re trying to distract gullible users by implying there’s protection that isn’t really there — without actually lying.
Yes, it’s technically true your funds are FDIC insured, but that doesn’t help you if we (crypto company) goes belly up. It’s like saying “we have offices in a building with a roof.” The roof will give your funds just as much protection as FDIC insurance.
I live outside of Boston and the spend large amounts of money to save money over time is playing out in regards to the public transportation system. The whole thing is broken and needs to be scrapped and rebuilt from the ground up. Of course, what will continue to happen is they will throw hundreds of millions to try to patch together a fix on infrastructure from the early 1900s.