So then it sounds like they probably had 10-15 banks (entirely reasonable for them to be expected to open this many accounts at unique banks, given their business model) which is a far cry from the 1200 OP complained about.

If your entire business model revolves around moving multiple billions of dollars via an asset-backed stablecoin model, it's reasonable to expect you to have dozens of bank accounts, in at least 3 time zones, and likely more.

I don't know why people (not saying you specifically) seem to have this expectation any entity should be able to deposit billions of dollars risk-free at a single institution. The same people who intuitively grasp the value of having crypto distributed amongst multiple wallets rather than all in one, somehow can't grasp infinite $ cannot be deposited at a bank without risk.

If you're leaving 7 to 9+ figures in a single account, then either buy insurance, or only do business with banks which offer excess insurance.

I'm not sure any private insurance exists that can cover a $42m deposit?

It does. In the context of the financial services and reinsurance industries, $42 million is not an enormous amount of money.

Sorry I meant $42b, which is the amount of USDC collateral held by Circle.