7 ms·

You aren't insured for $650M in a bank account

Thrymr 4y ago
This isn't a single user, FDIC insurance is for $250k per user per bank. The point is that for regulated banks that number is clear and if you exceed it you will be aware of it, and if you haven't exceeded it you have a federal guarantee to recover your money. What assurance does anyone have in this case?
- notyourday 4y ago
  People do not understand what FDIC insurance is. It protects again bank failure. If the one's assets are drained from the bank, as long as the bank has not failed, it will have to make the account holder whole. That's why a company would be stupid to hold $200M at Podunk Bank of Littletown, KS but is perfectly fine to hold it in a DDA account at Bank of America, Citi or Chase
granzymes 4y ago
You have a legal system available, and banks that have to rigorously comply with that system.
- icelancer 4y ago
  This is true about cryptocurrency as well.
  - gowld 4y ago
    Where will Federal Marshals deliver the summons to the owner of wallet address 0x8723aa67f823dbe785dc923 ?
  - ChrisLomont 4y ago
    What percent of BTC has been stolen? What percent of USD has been stolen? And that shows the difference in how each is protected.
    - rossjudson 4y ago
      Interesting thought. Bitcoin circulates, and you have to wonder how much of it has passed through a fraudulent transaction -- at any time in the past. Someday when it becomes straightforward to walk the entire life of bitcoin backwards, there may be people who want their bitcoin back...because it's stolen property. If A has a TV, B steals the TV and sells it to C, who sells it to D...then the TV is still returned to A, and D is out of luck.
      - sfe22 4y ago
        But bitcoin can be mixed, how do you decide which of the next transactions contain your part of stolen bitcoins?
HWR_14 4y ago
The FDIC insurance of $250,000 is by the government in case the bank becomes insolvent. The FDIC can easily cover $650 MM in a single bank that has 3,000+ customers. Or really even fewer than that with multiple account types. But even then, if you store $650 MM in a Bank of America account, that money is protected against being stolen by BOA's anti-fraud software, laws, the trillions of dollars of assets BOA has.

This isn't a single user, FDIC insurance is for $250k per user per bank. The point is that for regulated banks that number is clear and if you exceed it you will be aware of it, and if you haven't exceeded it you have a federal guarantee to recover your money. What assurance does anyone have in this case?

notyourday 4y ago
People do not understand what FDIC insurance is. It protects again bank failure. If the one's assets are drained from the bank, as long as the bank has not failed, it will have to make the account holder whole. That's why a company would be stupid to hold $200M at Podunk Bank of Littletown, KS but is perfectly fine to hold it in a DDA account at Bank of America, Citi or Chase

granzymes 4y ago

You have a legal system available, and banks that have to rigorously comply with that system.

icelancer 4y ago
This is true about cryptocurrency as well.
- gowld 4y ago
  Where will Federal Marshals deliver the summons to the owner of wallet address 0x8723aa67f823dbe785dc923 ?
- ChrisLomont 4y ago
  What percent of BTC has been stolen? What percent of USD has been stolen? And that shows the difference in how each is protected.
  - rossjudson 4y ago
    Interesting thought. Bitcoin circulates, and you have to wonder how much of it has passed through a fraudulent transaction -- at any time in the past. Someday when it becomes straightforward to walk the entire life of bitcoin backwards, there may be people who want their bitcoin back...because it's stolen property. If A has a TV, B steals the TV and sells it to C, who sells it to D...then the TV is still returned to A, and D is out of luck.
    - sfe22 4y ago
      But bitcoin can be mixed, how do you decide which of the next transactions contain your part of stolen bitcoins?

HWR_14 4y ago

The FDIC insurance of $250,000 is by the government in case the bank becomes insolvent. The FDIC can easily cover $650 MM in a single bank that has 3,000+ customers. Or really even fewer than that with multiple account types. But even then, if you store $650 MM in a Bank of America account, that money is protected against being stolen by BOA's anti-fraud software, laws, the trillions of dollars of assets BOA has.