One of the more interesting emerging phenomena involving cryptocurrencies has been the recent rise of crypto treasury companies – that is, companies whose primary purpose is acquiring and holding cryptocurrencies as part of their corporate treasury. There arguably are a host of concerns with these kinds of firms. Among other things, and as discussed in the guest post below from Sarah Abrams, there may be issues for these kinds of firms in connection with FDIC deposit insurance disclosure requirements. Sarah is Head of Claims Baleen Specialty, a division of Bowhead Specialty. I would like to thank Sarah for allowing me to publish her article as a guest post on this site.
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Proposed changes by the Federal Deposit Insurance Corporation (FDIC) around signage and advertising (FDIC Proposal) may create emergent D&O exposure for companies building cryptocurrency (crypto) treasuries.
FDIC’s current signage and disclosure rules, created in 2023 (the Advertising Rule), in the wake of Silicon Valley Bank (SVB)’s failure, were meant to signal what protections exist for bank deposits. Notably, crypto holdings, like a significant number of SVB deposits pre-bank run, are not deposits and are not covered by FDIC deposit insurance. And as of mid-2025, depending on market conditions, there were roughly $100 billion in corporate “crypto treasury” holdings (companies holding crypto on their balance sheets), with a growing ecosystem of firms reaping fees or benefits from a crypto-treasury strategy.
This discussion will query whether a decrease in transparency of which deposits are “[b]acked by the full faith and credit of the U.S. Government” may increase D&O risk for companies joining the crypto treasury trend. Along with attempting to address the red flags tied to SVB’s collapse, the Advertising Rule was also created to address certain nonbank platforms attempting to blur distinctions between FDIC-insured and uninsured products. In fact, the FDIC demanded that certain crypto firms stop misrepresenting that their crypto exchanges and products were FDIC-insured.
However, the recent rise of corporate and institutional crypto treasuries may tie traditional FDIC-insured banking activity with uninsured platforms and assets, potentially creating disclosure, misrepresentation, and board-level oversight risk if the FDIC Proposal is adopted. The following will review the Advertising Rule, including its original intent, the recent FDIC Proposal, as well as how the concurrent rise in crypto treasuries has the potential to impact D&O underwriters.
The Advertising Rule and the FDIC Proposal
The FDIC is an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system. Its stated mission is to maintain public confidence in the nation’s financial system. The FDIC insures deposits in banks and thrift institutions for at least $250,000 per depositor, per insured bank, and creates rules and regulations regarding FDIC signage and how to use an official advertising statement when promoting deposit products and services.
In December 2023, the FDIC adopted the Advertising Rule to govern the use of official FDIC signs and advertising statements, and “to clarify the FDIC’s regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name or logo.” The Advertising Rule creates aesthetic guidance for displaying the FDIC-Insured official signage and requires strong disclaimers for non-deposit products, like crypto. The FDIC has continued issuing cease-and-desist letters to crypto platforms that imply FDIC insurance coverage for digital assets, a regulatory theme that has remained active throughout 2025.
The FDIC Proposal is calling for revisions, including dropping strict font and color code specifications for the official FDIC logo, and would narrow the locations where the logo must be displayed. For uninsured products, the FDIC Proposal narrows required labeling and notifications, allowing the notification that a financial product is uninsured to appear in fewer places and the latter to be less intrusive. As of late 2025, the FDIC Proposal has not yet been finalized, and industry comment letters have raised concerns that reducing uninsured-asset disclosures may undermine depositor clarity.
Relaxation of digital signage and labeling requirements may raise concerns of depositor confidence and risk perception; issues that were brought into sharp focus by the 2023 SVB collapse, where uncertainty about deposit coverage and uninsured balances amplified panic and may have contributed to the bank’s collapse.
SVB Lessons
As D&O Diary readers may recall, SVB closed after a run on the bank, and the FDIC became the bank’s receiver. SVB had a high level of uninsured deposits, with about 94 percent of its deposits uninsured as of year-end 2022. The bank also had an unusually concentrated customer base. SVB’s story, which may be important to consider as crypto treasuries become popular, is in brief: as customer deposits at SVB swelled, the bank put a large share of the deposited funds into treasury bonds and mortgage bonds (not FDIC insured), the value of which declined as interest rates rose. A coinciding rise in depositor withdrawal demands necessitated the bank to sell its entire available-for-sale investment portfolio at a loss. The bank was forced to close and the FDIC took over SVB as a receiver.
SVB’s failure may illustrate how uncertainty around uninsured assets can rapidly erode depositor confidence, a risk that the FDIC’s 2023 Advertising Rule sought to mitigate through clear digital signage and disclosure. As the FDIC now proposes pulling back on its Advertising Rule requirements, the coinciding emergence of crypto treasuries may raise renewed concerns about diminished transparency regarding uninsured deposits.
Crypto Treasuries
Briefly, a crypto treasury refers to the portion of a company’s balance sheet that is held in cryptocurrency or other digital assets rather than traditional cash or cash equivalents. Crypto held in a crypto treasury, even if supported by an FDIC-insured banking platform, is not an FDIC-insured deposit. As D&O Diary readers may recall, corporations have long managed excess liquidity through short-term investments in money markets or Treasuries, and recently, a growing number allocate capital to Bitcoin, Ether, or stablecoins as part of their treasury management or strategic investment strategy.
This practice has accelerated in 2025, and crypto treasuries may be held directly by a corporation, indirectly through a bank partner, or by fintech intermediaries that integrate custody, lending, and yield programs.
Discussion
The rise of crypto treasuries introduces unique D&O exposures when juxtaposed with the FDIC Proposal to relax rules around signage and advertising for insured deposits.
First, crypto is not FDIC-insured, and therefore, companies and banking partners should endeavor to make that distinction in marketing materials, investor communications, or digital interfaces. Especially if the FDIC loosens signage and labeling requirements, which may cause investor confusion when a bank platform displays the FDIC logo adjacent to crypto or stablecoin balances listed in public disclosures. This may lead to shareholder inquiries or litigation against directors and officers alleging misleading statements about deposit protection or a failure to disclose the uninsured nature and volatility of corporate crypto holdings.
In addition, SVB’s collapse demonstrated how a misunderstanding of uninsured assets can trigger a crisis of confidence. Similarly, if companies or banks maintain large crypto treasuries and the value of held crypto falls sharply, there may be a follow-on “sell off” stemming from concerns that the core deposits (crypto) are at risk of becoming worthless. This may cause shareholders to question corporate leadership or its board’s management of liquidity, and disclosure around crypto-treasury valuations could become a focus of post-loss scrutiny.
Finally, boards that authorize or oversee crypto-treasury strategies may be asked by shareholders to ensure appropriate compliance, custody, and disclosure controls regarding crypto treasury assets. Particularly because they are not FDIC insured. Although Caremark liability remains narrow, boards that authorize or supervise crypto-treasury strategies may face oversight scrutiny if they fail to implement controls around custody, valuation, disclosure, or insured-vs-uninsured asset differentiation, particularly where crypto holdings represent a material liquidity or operational risk.
Thus, as corporate and institutional crypto treasuries expand and the FDIC moves toward less prescriptive signage requirements, the line separating insured deposits from uninsured digital assets may become more porous. Therefore, D&O insurers may want to consider if there may also be increased risk arising from misrepresentation or disclosure failures, and board-level oversight should the FDIC Proposal be adopted.
The views expressed on this article are exclusively those of the author, and all of the content in this article has been created solely in the author’s individual capacity. This article is not affiliated with the author’s company, colleagues, or clients. The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any subject matter.