Because federal regulators said so over 10 years ago. They don't accept deposits as defined by FDIC, engage in fractional reserve banking, or otherwise meet the

Because federal regulators said so over 10 years ago. They don't accept deposits as defined by FDIC, engage in fractional reserve banking, or otherwise meet the definitions of a bank in the US. They're more like an escrow service, holding funds on your behalf in accounts at actual banks. They are a money transmitting entity, which means obtaining 54 state/territory licenses to operate in the entire US, and they hold all of those.