Pass-through FDIC insurance depends on Robinhood correctly maintaining records of each customer's share of the swept funds at each partner bank — if those records are inaccurate or if Robinhood itself fails, accessing this protection could be delayed or disputed, as seen in the Synapse fintech bankruptcy in 2024.
Robinhood operates through multiple separate legal entities — Robinhood Financial LLC (brokerage), Robinhood Securities LLC (clearing), and Robinhood Crypto LLC — meaning your protections, insurance coverage, and legal recourse differ depending on which product you use. Crypto assets held with Robinhood Crypto LLC are not protected by SIPC, so if Robinhood's crypto subsidiary fails, you may have limited recourse to recover your digital assets. You can review which entity holds your assets and the applicable agreements by navigating to the specific product disclosures linked in Robinhood's Disclosure Library at robinhood.com/us/en/about/legal.