Charles Schwab, whose clients hold $13 trillion, is adding three more cryptocurrencies to its offer. In the same message he wrote in bold that he was not responsible for any of them.
Key takeaways:
- Charles Schwab admits Solana, Avalanche and Chainlink to the Schwab Crypto platform. So far, only bitcoin and ether were there.
- The account is maintained by an FDIC member bank, but the cryptocurrencies themselves have neither deposit guarantees nor SIPC protection.
- The commission is 0.75 percent of the value of each transaction.
- You cannot open this account from Poland. Schwab Crypto operates only in the US and not in all states.
Joe Vietri, head of digital assets at Schwab, talks about “greater choice when building your digital allocation” in the release. It sounds like every broker’s message. The more interesting sentence is lower down in the disclaimers section.
Three tokens next to an action in the same application
The market reacted immediately. Solana rose in price by less than 7 percent, and Chainlink and Avalanche fell less. On the same day, however, the entire market rose before the Fed chairman’s speech in Jackson Hole. This is the strongest circumstantial evidence, not proof.
Is crypto in a bank protected like a deposit?
NO.
The Schwab Crypto account is operated by Charles Schwab Premier Bank, an entity that is a member of the FDIC. This is the American equivalent of our Bank Guarantee Fund. The bank is covered by a guarantee. Cryptocurrencies in an account in this bank, as stated in the notice, are not deposits. They are not covered by FDIC insurance or SIPC protection, which is a compensation system for brokerage house clients.
A security guard at the bank door is guarding the building. No one is watching the plastic bag you put next to you in the queue.
Schwab isn’t hiding anything here because he writes about it in bold. Rather, it shows how easy it is to confuse an institution with a product when the logo in the application is the same. Check your platform’s terms and conditions to see if the warranty covers the coins themselves. Very often, it only covers the zlotys lying next to them.
How much does 0.75 percent actually cost?
Schwab touts its commission as one of the lowest in the industry.
Check it yourself, because the percentage sounds innocent. When you buy for PLN 10,000 and later sell it, you give back PLN 150 before you calculate the profit or loss. With several transactions per month, this item begins to eat into the result.
Is that a lot? Depends on how much you trade. This is the only number from the entire message that you will convert into your own wallet.
Why don’t you create this account from Poland
Schwab lists the exclusions explicitly. Accounts are not available in New York and Louisiana, not available in dependent territories, and not available in any foreign jurisdiction.
There is one more sentence that you won’t find in the headlines. Schwab reserves the right to delay, change or withdraw support for any announced asset. So Solana, Avalanche and Chainlink are announced and not available for now. They are to appear “in the coming months”, and no specific date is mentioned even once in the announcement.
