Consumer Alert

After recent crypto-related bankruptcies, the Louisiana Office of Financial Institutions urges caution regarding crypto asset provider risk


- December 12, 2022 -

After the recent bankruptcy filings by several cryptocurrency exchanges, the Louisiana Office of Financial Institutions (LOFI) encourages consumers to be aware of the potential risks of investing in volatile crypto assets.  Louisiana consumers should be aware that crypto assets are high-risk products, and should not expect to be protected from, or reimbursed for, any losses.

Crypto asset providers are not governed by the same laws, rules and protections as financial institutions, which are required to have federal deposit insurance. The Federal Deposit Insurance Corporation (FDIC) has issued an advisory to inform the general public that it "does not insure assets issued by non-bank entities, such as crypto companies," and that the FDIC does not protect consumers against "the default, insolvency, or bankruptcy of any non-bank entity, including crypto custodians, exchanges, brokers, wallet providers, or other entities that appear to mimic banks."1

Some of the products and services offered by crypto asset providers can be similar to traditional financial products and services offered by financial institutions or brokerage firms, but without the same regulatory safeguards. Louisiana consumers should attempt to determine if they are purchasing regulated products through regulated companies, and platforms, before making any investment decisions.

Information regarding the Voyager, Celsius, FTX and BlockFi bankruptcy proceedings may be obtained directly from the following websites:

 

 

 

If you have any questions, please contact LOFI at (225) 925-4660.


1. Click Here for the Advisory to FDIC-Insured Institutions Regarding Deposit Insurance and Dealings with Crypto Companies


Updated December 12, 2022