this post was submitted on 22 Nov 2024
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CNBC spoke to a dozen customers caught in the Synapse fintech predicament, people who are owed sums ranging from $7,000 to well over $200,000.

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[–] [email protected] 44 points 1 day ago (1 children)

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.

So you're telling me that a company which manages $42 billion worth of assets doesn't have the money to hire a firm to track down where all of the money was transferred to? https://en.wikipedia.org/wiki/Andreessen_Horowitz

[–] [email protected] 16 points 1 day ago (1 children)

what surprised me about this, is, with as much money that's at stake, how the hat couldn't have been passed around to the stakeholders, to fund, then get the court to order an accounting using the plaintiffs forensic accountants. something about that doesn't make any sense to me at all.

[–] [email protected] 4 points 1 day ago

Because they don't want the crime exposed for whatever reason.

[–] [email protected] 36 points 1 day ago (1 children)

It's a nice day for Americans with savings to use the FDIC's bank finder tool to double-check whether their savings are in an FDIC-insured situation.

[–] [email protected] 10 points 1 day ago (1 children)

Or, alternative idea...

MAGACOIN GET YOUR MAGACOIN HERE

[–] [email protected] 7 points 1 day ago

They can't steal my money if its on hard drives buried in a dump.

[–] [email protected] 50 points 1 day ago (1 children)

People relied on accounts powered by Synapse for everyday expenses like buying groceries and paying rent, or for saving for major life events like home purchases or surgeries.

Gotta love US healthcare

[–] [email protected] 26 points 1 day ago (7 children)

I'd be broke a long time ago if I lived the US. Good thing I'm French and a surgery for a life threatening condition, plus 4 month of rehabilitation, costed me a whopping 0€.

[–] [email protected] 17 points 1 day ago* (last edited 1 day ago)

That's some kind of communist talk. In the Land of the Free you are your own man. No nanny state telling you what to do. You have options. You can be rich, you can put all your money into a scam bank, which is de facto sanctioned, (and die when they do a rug pull because you no longer have money for life saving, much less preventative care), or you can die. But this was your choice, and you can have a huge truck (N.B. the bank actually owns the truck, but in 5 years you'll have it paid off).

🇺🇲🇺🇲🇺🇲

In reality I left the US years ago and don't miss it, I do fear for friends though.

[–] [email protected] 6 points 1 day ago* (last edited 1 day ago) (1 children)

We have a fantastic medical system if you are poor in a state that funds it’s Medicaid system well OR wealthy enough to not be burdened by the cost of medical care.

[–] [email protected] 5 points 1 day ago (1 children)

To be fair, being poor only works if it is a clear cut life threatening issue. Otherwise, they treat and street you...

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[–] [email protected] 2 points 1 day ago (1 children)

Seriously? I had to pay $118,000. I fought insurance company for two years and eventually only ended up paying about $12,000

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[–] [email protected] 54 points 1 day ago (1 children)

when a bank is described as a "savings startup", you should run the other way screaming

[–] [email protected] 7 points 1 day ago (1 children)

Exactly. The combination of "bank" and "startup" is innately terrifying. Don't put more money than you can afford to lose in a place like that.

(Aren't there any laws in the US regarding who can call themselves a bank? Or is this another case of Americans being unwilling to do something sane and obvious because some politician has convinced them it will infringe on their "freedom"?)

[–] [email protected] 3 points 22 hours ago

Yes and no. Banks are strictly regulated. But that's why companies like Paypal continually remind people that they are not a bank, so they can escape that regulation.

[–] [email protected] 5 points 1 day ago (2 children)
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[–] [email protected] 10 points 1 day ago (2 children)

Isn’t that what they signed up for when they put their money in a nonFDIC insured account?

[–] [email protected] 34 points 1 day ago (4 children)

Read the article, and maybe don't be such a heartless bastard?

Several people CNBC interviewed said signing up seemed like a good bet since Yotta and other fintechs advertised that deposits were FDIC-insured through Evolve.

“We were assured that this was just a savings account,” Morris said during last week’s hearing. “We are not risk-takers, we’re not gamblers.”

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[–] [email protected] 7 points 1 day ago (1 children)

They changed to a cash sweep / brokerage model (not FDIC-insured at the individual account holder level) like 6 months before the bankruptcy. End users had to click a consent checkbox or the like and probably thought nothing of it.

[–] [email protected] 2 points 23 hours ago

That changes everything. That’s dirty pool, shouldn’t have been allowed by SEC/Fed or who ever their regulator was

[–] [email protected] 101 points 2 days ago (5 children)

The government should mandate warning labels on companies like that, maybe "fintech" would be a good word to force them to use, similar to the way large companies have to use the "enterprise" warning label and games companies have to be labelled "triple A" to know their products and services are low quality and have a high risk of failure.

[–] [email protected] 8 points 1 day ago (1 children)

Dont they have to write in the footer WE ARE NOT A BANK

Usually that's what I look for

[–] [email protected] 3 points 1 day ago

They do write that, but it also says that your money is deposited in an FDIC insured account.

And, according to the article, they even gave you a routing number and account from Evolve:

When I signed up, they gave me an Evolve routing and account number."

[–] [email protected] 24 points 1 day ago

I like your style

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[–] [email protected] 25 points 1 day ago (4 children)

Risky investment turns out to be risky. No one could have seen that coming.

[–] [email protected] 18 points 1 day ago (1 children)

This isn't about shareholders being wiped out. It's about account holders of what they thought were bank accounts losing everything because their accounts were powered on the back end by a company they'd never heard of or directly dealt with.

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[–] [email protected] 17 points 1 day ago* (last edited 1 day ago) (1 children)

If you see this as investment, then consider that investors were lied to (the startups claimed to have FDIC coverage) and didn't have accurate information to assess the risk.

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[–] [email protected] 64 points 1 day ago (2 children)

I'm not from the US so unfamiliar with any of this, but having followed the link to the Yotta website from the article, it is a... gambling site? What leap is missing that people would entrust their savings to gambling?

[–] [email protected] 57 points 1 day ago (2 children)

Might as well be a gambling site: It was a startup bank with no Federal backing (FDIC) that appears to have promised greater returns than traditional banks by investing your money and giving you some of the profits back from dividends.

Still, it was a startup that wasn't fully vested nor backed federally to secure people's deposits. Sad.

[–] [email protected] 79 points 1 day ago (1 children)

The lie was WORSE than that.

A lot of the fintechs invovled actually told people their money was safe, because it was subject to "passthrough FDIC insurance", because their money was ultimately put in an insured bank, and thus was safe.

Problem is that's not how it actually worked, so basically everyone was straight up lied to.

Basically the whole thing is that the bank keeps track of who owns which account and how much money they have, so if they go bust, you just have the FDIC come in and use that data and write checks, basically.

Except since they're disrupting banking, they also decided to just fucking not bother, and so even if there was going to be a payout, nobody has any fucking clue who has how much and in which bank said money was.

Absolute clusterfuck, and about what you'd expect from silly-con valley types.

[–] [email protected] 25 points 1 day ago (1 children)

“Hand us your money and us MBAs promise it’ll eventually get somewhere safe” is not reassuring even before the lie.

[–] [email protected] 3 points 1 day ago

MBAs? Oh my goodness no.

It was a couple of venture capitalists!

[–] [email protected] 11 points 1 day ago

Wow. Stochastic interest payouts. Another lamentable perverted contribution coming from irresponsible MBA schools

[–] [email protected] 45 points 1 day ago* (last edited 1 day ago) (4 children)

There was no interest on Yotta accounts. Originally, when you signed up, you were given a lottery ticket everyday for every 25$ in the account. There was a lottery everyday where you could win up to 25000. Then they switched to games where you essentially gambled with the tickets that were given based on your amount.

I was once a member but pulled the money when interest rates started to rise. I was lucky.

I'll also note, when signing up, I was given the impression this FDIC insured.

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[–] [email protected] 44 points 1 day ago (16 children)

I can't wait until TRUMP Dismantles the Protections that PREVENT this type of thing from Normally Happening!

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[–] [email protected] 24 points 1 day ago

Yotta Savings, the fintech that all these people deposited their money with, first came to my attention through this YouTube video from CoffeeZilla a couple months back, seems Yotta was a huge sponsor of really an astounding amount of YouTube creators, who while hawking Yotta to their subscribers also deposited their own money with Yotta as well. Huge mess.

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