FDIC tops out at $250 000 per bank (depending on exactly what you've got and in which accounts you might get to claim this limit more than once though). This is similar to schemes in the UK or the EU. They're protecting smaller individual savers etc. not corporations, not rich people. People who will be hurting the day after the bank fails, not a week later or a month later and so need money ASAP.

But that doesn't mean rich people need to be scared of a run on a conventional bank. Suppose you've got 10M in Big Bank, and it fails. FDIC will hand you $250 000, but your $9.75M doesn't vanish, it's just that you need to wait for administrators to take the bank to pieces, figure out what it owned and sell it for a good price, then they'll pay you some fraction - often 100% - of your $9.75M depending on what they recovered. Eventually.

Landsbanki (in Iceland) for example failed in the aftermath of the global financial crisis, it's own government couldn't afford to pay to fix this because Iceland's banks had become larger than Iceland's own economy (oops), and the Icelandic people refused to allow their government to legislate to pay the money back over time, but eventually the bank's liquidators sold enough of the assets Landsbanki had owned for enough money to pay creditors like the UK government the billions of dollars owed. Took almost ten years.

The thing that's a concern for a crypto institution is: Are there real assets?

Even for a failed investment bank, where assets are sometimes more dubious in reality when administrators try to sell them than they seemed on paper (e.g. a NINJA house loan) those are assets, they do have value. If you default on your mortgage the bank takes the house. The mortgage "failed" but it doesn't magically have zero value. On a $1.5M mortgage is that house worth $1.5M? Probably not. But it's also not worth $0.

Whereas there's a good chance many crypto outfits own few real assets and so there is nothing for administrators to sell, it just evaporates.