Synapse Fintech Crisis: Thousands Lose Savings, FDIC Insurance Questions Raised
Thousands of customers using fintech savings apps like Yotta lost access to hundreds of millions of dollars after a dispute between the fintech middleman Synapse and its banking partner, Evolve Bank. A bankruptcy trustee discovered up to $96 million in missing funds, leaving customers with minimal returns despite FDIC-insured accounts. This highlights the risks of relying on third-party fintechs that don’t provide direct bank relationships, resulting in significant financial losses for ordinary individuals. The situation exposed failures in the regulatory oversight of these systems, leaving affected individuals with little recourse to recover their savings.
John Q. Hosedrinker