Reminds me of the crazy situation with that fintech "bank" that went under. They were basically a ledger over a real bank. The real bank was FDIC insured, but the protection for the underlying doesn't necessarily mean anything for your 'virtual' account in the ledger. FDIC would only help you if there was some insolvency in the under-layer.

Bunch of customers were screwed by the bankruptcy of the upper layer. Maybe there is some hope for at least the FDIC cracking down on this deceptive fintech trick in the future.

https://www.usatoday.com/story/money/personalfinance/2025/04...