Game Changer? Crypto Prime Dealer Unveils FDIC-Insured Accounts
SFOX has announced FDIC-insured segregated accounts, a sign that the industry is inching closer to mainstream adoption. | Shutterstock
Cryptocurrency prime dealer SFOX is partnering with M.Y. Safra Bank of New York to offer traders and investors deposit accounts backed by the Federal Deposit Insurance Corp. (FDIC).
The partnership marks the first time FDIC insurance has surfaced in the crypto dealer model, according to an SFOX blog. The arrangement will enable traders direct access to their funds for “fast, global crypto trading.”
Up till now, the FDIC seems to have avoided the crypto space.
BREAKING: @SFox just announced segregated accounts that are FDIC-insured.
Government-backed insurance is a BIG step towards mass adoption for regular consumers.
THE VIRUS IS SPREADING 🔥
— Pomp 🌪 (@APompliano) May 14, 2019
Great for Crypto, Sort Of
The implications of this partnership are huge given the FDIC is the agency that protects bank customers from losses of up to $250,000 per financial institution.
However, there’s a sad note.
Bloomberg pointed out that the insurance covers the cash portion of a crypto transaction, not bitcoin, ether, or other digital assets SFOX users buy on the exchange.
No matter, this is still positive news for the space in which supporters continue to fight off critics about its legitimacy.
The Nitty Gritty
Approved SFOX users can access FDIC-insured accounts with M.Y. Safra Bank through SFOX’s platform. They will receive that same insurance of up to $250,000,