Usually, no—not through U.S. federal deposit or brokerage protections. FDIC insurance does not cover cryptocurrency or theft from an exchange, and SIPC protection is not hack insurance. An exchange may carry private insurance, but whether it applies to a particular loss depends on the policy and the circumstances.
This answer covers U.S. federal protections. Rules and protections may differ in other countries, and the exchange’s legal entity and current policy matter.
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Does FDIC insurance cover cryptocurrency on an exchange?
No. The Federal Deposit Insurance Corporation (FDIC) insures eligible deposits at an insured bank if that bank fails; it does not insure crypto assets issued or held by a nonbank crypto company. The FDIC’s July 28, 2022 fact sheet says that deposit insurance does not apply to crypto assets and does not protect against losses due to theft or fraud. It also does not cover a nonbank crypto company’s failure, insolvency, or bankruptcy.
A crypto company’s relationship with a bank does not make crypto in an exchange account FDIC-insured. Cash is a separate question: it may qualify for FDIC protection if it is held as an eligible deposit at an insured bank. The FDIC’s July 29, 2022 advisory cautions banks to monitor crypto companies so they do not misrepresent the availability of deposit insurance.
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How to check whether cash may be covered
- Identify the legal entity holding the cash and the actual bank where it is deposited.
- Check the account arrangement and who legally owns the deposit. A balance displayed in a nonbank app is not automatically an insured bank deposit.
- Confirm eligibility with the bank and the FDIC’s applicable rules; coverage depends on the deposit and ownership arrangement.
Does SIPC protect cryptocurrency or reimburse a hack?
No. The Securities Investor Protection Corporation (SIPC) addresses certain missing customer property when a SIPC-member broker-dealer fails. It is not protection against investment losses or a hack at a crypto exchange. SIPC says digital or crypto assets that do not qualify as securities are not protected. See SIPC’s explanation of what it protects.
Can an exchange’s private insurance cover a hack?
Possibly, but the word “insured” alone does not establish that your account or loss is covered. Private insurance is governed by the specific policy: its named insured, covered assets and events, exclusions, limits, and claims requirements. A reviewed SEC filing illustrates that crypto-related coverage can be limited and may not be available on commercially reasonable terms; it is evidence about that company, not every exchange’s policy. The filing should not be read as a general description of exchange insurance.
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- Tap once to manage your entire crypto wallet across 90 blockchains - no USB cables or Bluetooth, no batteries, no setup. Access 14,100+ coins & tokens, DeFi, NFTs, and staking instantly from your phone
- Smart backup: Use your second Tangem Wallet as your Backup keys with end‑to‑end encryption; no more papers, pictures. If one card is lost, the remaining can still restore full access, with an optional seed phrase available for advanced users.
- Engineered to last up to 25 years: Waterproof (IP69K), shockproof and tested for extreme temperatures from −25°C to 50°C. A durable cold wallet with long‑term protection and independently audited security.
- Trusted by 6 million users worldwide (4.9 App Store, 4.8 Google Play) - buy, sell, swap, stake, and spend cryptocurrency directly. The secure offline storage wallet designed for how people actually use crypto wallets
In particular, distinguish a compromise of the exchange’s own systems or wallets from a customer’s account takeover. A stolen password, phishing attack, or SIM swap may be treated differently from an exchange-wide security incident. Do not assume a policy covers either event, or that it pays each customer directly.
Questions to check in the current policy or disclosure
- Who is insured: the exchange, a custodian, customers, or some combination?
- Which assets, wallets, and kinds of loss are covered?
- Does coverage apply to customer-specific account takeover, or only specified operational losses?
- What exclusions, deductibles, aggregate limits, or per-customer limits apply?
- What evidence and deadlines does the claims process require?
What each protection does—and does not—mean
| Protection or claim | What it addresses | What it does not establish |
|---|---|---|
| FDIC deposit insurance | Eligible deposits held at an insured bank if that bank fails. | It does not insure crypto assets, a nonbank exchange, or theft and fraud. |
| SIPC protection | Certain missing customer property when a SIPC-member broker-dealer fails. | It does not insure investment value or crypto assets that do not qualify as securities. |
| Exchange or custodian private insurance | Only the losses and parties covered by that particular policy, subject to its terms. | A general claim that assets are insured does not prove that a customer, account takeover, asset, or hack is covered. |
How to evaluate an “insured” claim
- Separate cash from crypto. Identify the legal entity holding each balance; do not treat an exchange’s cash and crypto as the same kind of asset.
- Verify any bank-deposit claim. Find the bank and deposit-account arrangement, then establish who owns the deposit and whether it is eligible. Do not infer coverage from a bank partnership or app balance.
- Read the exchange’s current insurance disclosure. Look for the named insured, covered assets and events, exclusions, limits, deductibles, and claims process. A policy summary may not include every term.
- Check the incident type. Look for explicit language about exchange-system breaches versus compromised customer credentials or devices. Do not assume the same coverage applies.
- Ask for clarification in writing. If the disclosure does not answer whether a particular loss is covered, ask the exchange which legal entity and policy apply to your account and event.
Treat broad “FDIC insured” language from a crypto company cautiously: the FDIC has specifically warned about misrepresentations of deposit-insurance availability. For a specific loss or claim, the relevant documents are the exchange’s exact legal entity and current policy terms.
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