You just don't launch a financial product of this nature, out of your ass like that. If that was the case then Robinhood customers have legitimate reasons to be concerned about the safety of their funds and securities. (For the record, I'm on of those Robinhood customers).
… not without prominently mentioning the block chain, at least.
Unless they worked with the SIPC up-front to ensure that these funds would be covered, and that the SIPC actually, you know, has the means to cover them, then the only way account holders are going to find out if their are protected or not is in the aftermath of a crisis, after a long and drawn out lawsuit.
When I saw the headline, I thought about signing up but hadn't gotten around to reading the fine print.
Glad I didn't waste my time.
A: Are our customers accounts insured?
B: Yes, through SIPC, which is like FDIC for brokerages.
A: Great! Let's create this product.
No more questions were asked.
[0] http://catb.org/jargon/html/H/Hanlons-Razor.html