Sarah Downey

“Some companies have set up FDIC-like insurance or other backstops, but whether these pay out depends heavily on the facts of each case. Even without insurance, many exchanges try to repay customers from their own reserves to protect both their customers and their own reputation,”

Sarah Downey · said date not stated · reported 2026-10-31

Downey said some crypto companies have FDIC-like insurance or backstops, but payouts depend on the facts of each case.

“If they use a third party, they should check that most funds are stored offline or protected with multi-party computation. An investor's own funds should also be stored separately from the exchange's own funds,”

Sarah Downey · said date not stated · reported 2026-10-31

Downey said investors using a third-party custodian should verify funds are stored offline, protected with multi-party computation, and held separately from exchange funds.