User funds deposited into FTX can’t be insured

Users with funds on FTX might not be able to return their funds if the exchange’s deal with Binance falls through.

According to the exchange’s terms of service agreement, no user funds deposited into the exchange can be insured:

“Neither Digital Assets nor any fiat currency or E-Money held in your Account is eligible for any public or private deposit insurance protection.”

If Binance’s plan to acquire FTX falls through, the exchange might not be able to return much of the funds deposited to user accounts.

Ethereum network withdrawals from FTX effectively stopped on Nov. 8 and the exchange provided no information as to when they might be resumed. Binance said in its announcement that it will begin a due diligence process in the coming weeks, but noted that the acquisition deal might not go through.

With no insurance covering the funds deposited to FTX, users who saw the value from their accounts wiped as they were unable to withdraw might have to take their losses. FTX has not commented on the issue.

Reporter at CryptoSlate

Armed with a classical education and an eye for news, Andjela dove head deep into the crypto industry in 2018 after spending years covering politics.