FDIC pass-through insurance — FDIC pass-through insurance lets a non-bank fintech offer FDIC coverage to its customers by holding their deposits at one or more FDIC-insured partner banks; coverage flows through the partner bank to the end user up to standard federal limits.
A non-bank fintech is not itself an FDIC member, but it can custody customer USD at an FDIC-member bank under a properly-disclosed pass-through arrangement. Each customer's share is treated as an FDIC-insured deposit at the partner bank, up to the standard $250,000 per-depositor / per-bank limit.
Pass-through coverage requires three things: a written agreement, accurate per-customer recordkeeping at the partner bank, and clear disclosure to the end customer. Coverage activates only on bank failure — not on fintech failure. (Synapse 2024 was the cautionary tale.)
Kronos USD balances are FDIC-insured via pass-through coverage at our partner banks through Bridge.xyz. The $250,000-per-depositor limit applies per partner bank, so balances spread across multiple partner banks expand the effective coverage.
Yes, up to the standard $250,000 federal limit per partner bank.
FDIC pass-through covers bank failure, not fintech failure. Bridge's arrangement protects deposits at the partner bank.