> Banking services provided by Evolve Bank & Trust and Thread Bank; Members FDIC.”

I just don't understand why on Earth it's legal to use the term "FDIC" one sentence away from "not a bank" without there being a regulatory framework defining minimum record keeping and reporting requirements to avoid exactly this type of failure.

The European "e-money" scheme seems to be exactly the opposite: Deposits are not insured (I believe there are requirements on the stability of the depository bank), but intermediaries, i.e. "financial technology companies", have to make detailed reports about their customers' balances available on a very short time frame to avoid exactly such problems.

Ideally, there would be a combination of both (pass-through insurance against bank failure and reporting requirements to reduce the blast radius of non-bank failure).