However, now that Paypal has suspended Mt Gox's account, anyone wanting to work with that exchange now has to jump through additional hoops by opening up a Dwolla or Liberty Reserve account. Personally, I found these sites to be rather shady looking.
Incidentally, they are FDIC and NCUA insured: http://www.dwolla.org/help/dwolla-deposits-are-protected-by-...
My question would be, are individual Dwolla accounts protected on a per depositor basis? Or, is it just Dwolla Corp's own bank account which is protected under FDIC. Their website doesn't make that clear.
It's entirely possible that user funds are stored in a bank account, owned by Dwolla, and that bank account is FDIC insured. If that's the case, then that bank account is only insured up to $250,000 USD.
The former. If it were the latter, then writing "Dwolla Deposits Are Protected By The FDIC and NCUA" on their web page would be fraud.
Yes, every dime you have in your account is protected by the FDIC and NCUA. The same way that amounts in your PayPal balance are protected.
http://www.dwolla.org/help/dwolla-security-and-partner-overv...
PayPal does the same thing, but at least they're upfront about how it works: https://www.paypal.com/cgi-bin/webscr?cmd=p/gen/travelers-ou...
And I don't keep money in my PayPal account either.
They are "not a bank" so that FDIC insurance doesn't apply to you it applies to whatever bank account they are using to hold everyone's money. If they go bankrupt I am not confident I could get my money back.