Some platforms offer pass-through deposit insurance on cash held at partner banks, while crypto assets themselves typically aren’t insured.
“Insured” sounds like a yes-or-no thing. In crypto, it depends on the bucket: cash, stablecoins, coins, and any yield program you join. One label rarely fits them all.
This guide shows what insurance can exist on a crypto exchange, what it doesn’t mean, and how to confirm claims fast. A short checklist appears near the end.
Are Any Crypto Exchanges Insured?
Some exchanges have limited insurance tied to specific buckets. The most common is pass-through deposit insurance that can apply to cash held at FDIC-insured banks (or insured credit unions in the U.S.). That insurance is tied to the bank deposit, not to the exchange’s own balance sheet.
Some platforms also buy private theft policies for assets under their custody controls. Those policies can help in a narrow slice of events. They are not a promise that all customer losses get reimbursed.
So when people ask, “are any crypto exchanges insured?”, the best answer is: cash may qualify in some setups; coins and tokens usually don’t; private policies vary and require a quick read of the terms.
Common Insurance Labels And What They Apply To
| Label You’ll See | What It Applies To | What To Confirm |
|---|---|---|
| FDIC pass-through deposit insurance | Eligible cash deposits held at an FDIC-insured bank | Partner bank named; trigger is bank failure; records tie balances to users |
| NCUSIF pass-through deposit insurance | Eligible cash deposits held at an insured credit union | Credit union named; limit is per depositor under NCUSIF rules |
| SIPC | Customer securities held at a SIPC-member broker-dealer | Asset must be a security; most crypto assets are outside SIPC |
| Crime policy | Some theft events affecting the platform | Event list, exclusions, payout limit, and user benefit language |
| Cyber policy | Some incident response costs and liability | Often pays response costs, not user asset loss |
| Offline custody policy | Assets stored offline under stated controls | Percent offline and whether the limit matches offline holdings |
| Segregation language | Separation of user assets from firm assets in operations | Agreement explains ownership, segregation, and withdrawal rights |
| Reserve attestation | Snapshot proof of holdings at a point in time | Date, scope, and whether liabilities are included |
When Cash On A Platform Can Qualify For Deposit Insurance
Some platforms hold user cash in pooled custodial accounts at insured banks. If a partner bank fails, pass-through deposit insurance may apply to each user up to the standard limit, as long as the account structure and records meet FDIC rules.
The FDIC explains deposit insurance basics, including products it insures and products it does not. Start with the FDIC deposit insurance overview, then compare its definitions to your platform’s disclosure page.
Three Details That Decide Eligibility
- Where the cash sits. The disclosure should say cash is held at one or more FDIC-insured banks (or insured credit unions), not just “in custody.”
- How balances are tracked. Pass-through treatment relies on records that show what portion of the pooled account belongs to each user.
- What product the cash becomes. If the balance is swept into a fund or another instrument, it can fall outside deposit insurance.
What Deposit Insurance Does Not Protect
Deposit insurance is designed for a bank failure. It is not a backstop for an exchange’s bankruptcy. It also does not protect coins, stablecoins, or trading losses. If the platform fails while your cash is still held at an insured bank, the bank failure trigger is the one that matters for the insurance to pay.
Coins And Tokens Usually Aren’t Insured Like Bank Deposits
Deposit insurance is for bank deposits. Crypto assets are not bank deposits, even when an app makes them feel bank-like.
SIPC protection is tied to securities held at a SIPC-member broker-dealer. The U.S. Securities and Exchange Commission notes that SIPC does not protect custodial claims for crypto assets that are not securities. See the SEC FAQs on crypto-asset activities for the core language.
Practical takeaway: if you’re holding a typical coin like BTC or ETH on an exchange, assume there is no government-backed insurance for that asset. If a platform claims otherwise, read until you can name the trigger and the payer.
Private Insurance Exists, With Narrow Triggers
Many large platforms buy private policies. They often target theft events that hit the platform, such as stolen signing material or insider theft. These policies can reduce the blast radius of a custody incident. They still come with limits and exclusions.
Quick Reality Checks For Private Policies
- Does the platform name the insurer or at least the policy type?
- Does it say which storage method the policy applies to (offline, online, both)?
- Does it state a maximum payout, or only say “insured” in general terms?
- Does it say users are direct beneficiaries, or only that the firm is insured?
Also watch for what is rarely paid: market moves, user-authorized scams, and user mistakes like sending funds to the wrong destination.
How To Check Claims Fast Without Guessing
Open the user agreement and the insurance disclosure page. Then search within the page for: “FDIC”, “NCUSIF”, “SIPC”, “pass-through”, “beneficial owner”, “segregated”, and “insurance”. You’re trying to pin down three things: which bucket, which trigger, and who pays.
Step 1: Split Your Balance Into Buckets
- Fiat cash held as cash
- Stablecoins
- Coins and tokens
- Assets placed into staking or lending products
Step 2: Name The Trigger Event
If the trigger is “partner bank failure,” you’re reading deposit insurance on cash. If the trigger is “theft event while assets are in our custody,” you’re reading a private policy. If the trigger is unclear, treat the claim as incomplete.
Step 3: Check The “Not Insured” Lines
A careful platform will plainly state that crypto assets are not FDIC insured and that deposit insurance, if available, applies only to cash held at insured institutions under certain conditions. That kind of line is reassuring, not alarming.
Traps That Create A False Sense Of Safety
SIPC Mentioned Next To Crypto Trading
A company can be linked to a SIPC-member broker-dealer and also run a separate crypto platform. SIPC membership does not automatically extend to all products. Match the claim to the exact account and the exact asset type.
Stablecoin Reserve Claims
Reserve statements can help you judge a stablecoin issuer. They do not make your stablecoin balance a bank deposit insured in your name.
Staking, Earn, And Lending Add-Ons
Yield programs often change your risk. Read whether title transfers, whether assets can be re-used, and what happens in insolvency. If the terms let the platform re-use your assets, treat it like credit risk.
Habits That Cut Risk
Insurance is one layer. Your daily habits do a lot of the heavy lifting.
Keep Only A Working Balance On Exchanges
Keep the balance tied to near-term trades. Move longer-term holdings to self-custody where you control the signing device and backup setup.
Use Account Controls
Turn on strong multi-factor authentication. Set withdrawal allowlists where offered. Store backup codes offline. Many losses start with account takeover, and insurance rarely pays for user-side compromise.
Test A Full Withdrawal Early
Before you leave a large balance on a platform, do a small deposit and a full withdrawal. You’ll learn quickly whether there are delays, hidden limits, or surprise fees.
Crypto Exchange Insurance Limits By Account Bucket
When you ask “are any crypto exchanges insured?”, decide what you want insured. Bank-style protection lives with the cash bucket, and only when pass-through terms are stated clearly. Theft-risk reduction for crypto assets depends on custody controls and private policy scope, so keep only the balance you need online.
What A Solid Insurance Disclosure Looks Like
A solid disclosure reads like a label, not an ad. It names the bucket (cash only, or assets held in offline custody), names the trigger (bank failure, theft event), and states the limits. It also says what is not insured in plain words, so you don’t fill gaps with guesses. If you see vague lines like “your funds are insured” with no bank names, no trigger, and no limits, treat that as a sign to slow down and dig into the user agreement before you deposit. Save screenshots of the disclosure and agreement for your records.
Five-Minute Deposit Checklist
| Check | Where To Look | Good Sign |
|---|---|---|
| Cash location | Insurance disclosure | Cash held at named FDIC-insured banks or insured credit unions |
| Pass-through terms | User agreement search for “pass-through” | Conditions stated, with standard limits tied to bank failure |
| Crypto deposit insurance claim | Disclosures | Clear statement that crypto assets are not FDIC insured |
| SIPC scope | Broker-dealer page | SIPC tied to securities custody, not typical coins |
| Private policy scope | Insurance page | Event list, limits, exclusions, and user benefit language |
| Custody segregation | Custody terms | Ownership and segregation language, plus withdrawal rights |
| Security settings | Account settings | MFA, allowlists, time delays for new withdrawal destinations |
| Exit test | Small round trip | Deposit and withdrawal work smoothly with clear fees |
What To Do When Wording Feels Slippery
If a platform says “insured” without naming the insured institution, the trigger event, and the bucket, treat the claim as incomplete. Keep only an operational balance on the platform, self-custody longer-term crypto, and pick platforms that spell out cash deposit insurance terms in plain words.
Re-check after major product changes. Partner banks can change. Yield programs can change. Your risk bucket can shift fast.