[hn_throwaway_99]

> SIPC protection covers against a brokerage firm failing, which in our case is Apex Clearing. We are not currently a brokerage so SIPC would not apply if Double goes bankrupt.

I thank you for being upfront and honest about this. The tough spot you'll find yourself in, then, is that if any money goes missing between you and Apex, customers are completely SOL. This is not a theoretical risk, this is exactly what happened in the Yotta/Synapse fiasco. Even if I trust that you guys are much better technologists than Synapse, would I be willing to take that risk for a teeny, teeny reduction in fees compared to an index ETF? Sorry, not for me.

EDIT: Wanted to put an edit up here so that it doesn't get lost. Thanks for your response below - for me, that was the critical information I needed, that I can directly verify that my SIPC-insured funds are held by the SIPC-insured entity. That was indeed not the case with Yotta/Synapse (and, indeed, most fintechs who keep customer funds in an FBO account at a partner bank), so I really appreciate the clarification. FWIW, I think it might be worth it to add a small blurb in the "SIPC Insured" section saying that your insured funds can be verified at any time.

Kudos, you guys have thought through a good deal of the important details, and sufficiently assuaged my concerns.

[jjmaxwell4]

I'd argue the specifics are quite a bit different than Yotta/Synapse.

We do not hold any funds ourselves. You connect your bank and ach/wire money to an Apex bank account. You can verify your holdings via apex anytime (see: https://help.double.finance/en/articles/10262406-how-can-i-v...)

[yottathrow]

Yotta does not hold any funds themselves. You connect your bank and ach/wire money into an Evolve bank account.

The problem is that unbeknownst to users, Evolve had no record of what belonged to which user—it all came via Synapse on behalf of Yotta. And when Synapse went bankrupt, everyone pointed fingers about where the money is and who it belongs to.

[morgante]

https://help.double.finance/en/articles/10262406-how-can-i-v... makes a big difference, since it sounds like Apex does have their own ledger of accounts, independent of Double.

Evolve not having their own ledge was exactly the problem.

[Terretta]

OTOH, some users seem able to talk to Apex about their shares that had been via an "app", and are still frustrated… with Apex:

> My own personal experience with Apex - I transferred measly GME positions out of Stash app (Apex) to Fidelity in June. My Apex/Stash account is still locked from this transfer. My CS requests have been escalated to the broker (Apex) repeatedly. Finally today, Apex confirmed they will unlock my account in 4 business days. That’s 34-36 calendar days after share transfer. All this DD is much smarter than me, but even in little ways these big explanations offer a simple reason for these shenanigans. I have NEVER had my account locked for share transfer past the confirmed transfer date for any other position. They had the gall to tell me today that they needed to speak with Fidelity directly to confirm receipt and Fidelity “received” my shares 3 weeks ago, which was 3 weeks after I initiated it. Why all the runaround?

[datavirtue]

Surprisingly common for fintechs to be ledgerless. They will always end up with one if they last long enough.

[hn_throwaway_99]

Will reply directly to your comment, as I started the concern in this thread, and I think it's important to point out that the situation is materially different based on what jjmaxwell4 has responded.

With Evolve, money was just pooled into an "FBO" ("for benefit of") account, and not ledgered directly to individual users. This is apparently not the case with Apex since you can verify your balance with them directly. They report your balance, so if any money goes missing, you should have an insurable case with them directly.

[datavirtue]

Yep. The bank has to require reconciliation of the accounts that are active in the FBO. Oddly enough, there is zero standardization in banking regulations and recon is an afterthought and rarely done. Doubly so if you are talking B2B.

Reconciliation costs a lot of money. They typically just watch the balance and and bark at the fintech for more money when it runs out. There are people at every bank calling partners every day demanding wires for overdrawn FBO accounts. Buyer beware.