That's both sort of an explanation - even my local grocery store uses armored cars to transport money to/from a bank, not holding piles of it at home - and more red flags.
It’s important to remember that Quadriga wasn’t able to get banking services in Canada. Canadian banks were refusing to do business with any cryptocurrency-related businesses.
Keeping the cash at home wasn’t a good idea, but being blocked from using traditional solutions necessitated that they build their own.
Something similar happened with cannabis related businesses in the US.
Since essentially ALL banks are FDIC insured, taking money from a business selling cannabis, which is illegal under Federal law, is prohibited. There have been multiple documentary/news show episodes about this.
Interesting side fact, NPR Planet Money did a special where they tried to find a bank that was NOT FDIC insured. They picked the smallest single physical location bank they could find but even that bank was FDIC insured.
