Case Study - A Hypothetical Monetization Model

I actually heard this is how Venmo made money at a certain point, but further research suggests otherwise. Regardless, the concept sounded interesting and wanted some thoughts from this community. Consider this scenario using Venmo as an example...

Users pay each other using the Venmo app and each users virtual bank account grows. Venmo then takes all the money from users' collective accounts and invests it. They then pocket the profits from those investments.

What some benefits and risks to this model? Ethical implications?

I had some initial thoughts, but I would welcome opposing thoughts, comments, or insights.

1. The money in the users' account must be insured in case Venmo lost money in their investments.
2. It would take either an extreme amount of money or a long period of time investing in order to make profits large enough to be worth it.
3. Possibly some ethical/legal concerns since Venmo would make profits from investing other peoples money, and not giving any of it back.

What do you think?