Sure, you've got some businesses with poor risk and treasury management who might be carrying a bunch of cash in a demand deposit account that isn't covered, but your vast majority of depositors will be fine.

Yes, 95% of the US population don't have more than $250,000. Let's say that that 95% has on average something like $5,000 in saving/actives. The problem is not that the FDIC will not "honor" those millions of $5,000 checks. The problem is that most of those "actives" are actually managed by other entities, who "bulk load" the money into bank accounts. Adding those up will make more than $250,000 pretty quickly. So the question still remains: If a bank goes under, and say, a hedge-fund with retirement money is saving a good chunk of its customer funds in said bank under a consolidated account with more than $250,000. Will the FDIC cover the excess to make the hedge-fund whole?

It's like the farce that a lot of those Crypto centralized companies put in their websites: "We are FDIC insured" ... well yeah, their accounts might be FDIC insured, but it is only THEIR first $250,000 that is insured, not the first $250,000 of each of their customers.

After decades of reruns and annual 24-hour marathons of "It's a Wonderful Life" I don't think the general public is unaware of this very basic aspect of the banking industry. I knew by the time I was 8 that the money was in Joe's house etc., and I didn't grow up in a household that had any particular knowledge of the banking & finance industry.

If you asked most people "Do banks keep all of the money everyone deposits in one big vault, or a bunch of little vaults, all of the time?" I think most people would at least have some vague notion that the answer is "Um, No?"

Mixing shareholder equity with depositor funds is a totally different thing. In general, depositors are a bank's most senior creditors (they get money before the electric bill gets paid) and shareholders are the least senior (they only get money after ever single other bill is paid). Mixing these funds makes a mess of that promise and should rightfully reduce trust that Binance would be willing or able to pay depositors in a crisis.