A Reverse Bank Robbery: Bank Robs Customers

chemgator · Nov 23, 2024 at 8:27 AM

This is bizarre. A financial technology firm called Synapse was handling transactions between a real bank (Evolve Bank) and a savings startup (Yotta), when it collapsed. No one knows where the money is. Synapse can't afford to do the reconciliation on the accounts, and $96 million is missing. People are being offered as little as a half penny on the dollar for their savings (the average customer is being offered $0.15 or so). It's being called a reverse bank robbery. Apparently there was no FDIC insurance on the accounts. People are getting tired of hearing "Yotta Yotta Yotta, there's no money left." Where is Sam Friedman when you need him?

'I have no money': Thousands of Americans see their savings vanish in Synapse fintech crisis

The crisis started in May when a dispute between Synapse and Evolve Bank over customer balances boiled over and the fintech middleman turned off access to a key system used to process transactions. Synapse helped fintech startups like Yotta and Juno, which are not banks, offer checking accounts and debit cards by hooking them up with small lenders like Evolve.

In the immediate aftermath of Synapse’s bankruptcy, which happened after an exodus of its fintech clients, a court-appointed trustee found that up to $96 million of customer funds was missing.

The mystery of where those funds are hasn’t been solved, despite six months of court-mediated efforts between the four banks involved. That’s mostly because the estate of Andreessen Horowitz-backed Synapse doesn’t have the money to hire an outside firm to perform a full reconciliation of its ledgers, according to Jelena McWilliams, the bankruptcy trustee.

But what is now clear is that regular Americans like Morris are bearing the brunt of that shortfall and will receive little or nothing from savings accounts that they believed were backed by the full faith and credit of the U.S. government.
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BLING · Nov 23, 2024 at 8:13 PM

Already a thread (that was recently updated).

Potentially Millions left without access to their money

docspor · Nov 23, 2024 at 9:30 PM

If u have a gun u can rob a bank, if u have a bank u can rob everyone

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