I have no money': Americans left high and dry in synapse Fintech fiasco

The Savings Vanishing Act: A Tech-Turned-Terror Story For 15 years, Texas schoolteacher Kayla Morris did everything by the book—saving for her family’s future. She and her husband stashed away over $280,000 from selling their home, believing it was safely tucked in a savings account at Yotta, a popular fintech startup. Little did she know, her money was on a one-way ride into fintech oblivion. After a dispute between Synapse, the middleman fintech that powers Yotta, and Evolve Bank & Trust , Morris’s account was frozen for six months. When she finally got an update, it wasn’t the good news she hoped for. Instead, Evolve offered her a measly $500 of her nearly $282,000. Morris, like thousands of others, is now a victim of the collapse of Synapse, which had acted as the intermediary between fintech startups and small banks. The result? A tangled web of missing funds, empty promises, and financial ruin for customers who thought their money was secure. The Mystery of Missing Millions The crisis began earlier this year when Synapse’s bankruptcy left customers with no access to their accounts. A court-appointed trustee discovered that up to $96 million was missing, and even after months of court-ordered investigations, the funds remain unaccounted for. Without enough resources to fully investigate, the estate of Synapse—backed by Andreessen Horowitz—has left customers like Morris with very little to hold on to. As one trustee put it, “It’s like trying to find a needle in a haystack, but without the needle.” A ‘Reverse Bank Robbery’? Thousands of victims are now calling this the “first reverse bank robbery” in history. And they might have a point. As Zach Jacobs, a small business owner from Florida, explained after losing over $94,000, “When you tell people about this, it’s like, ‘No way this can happen.’ A bank just robbed us.” Jacobs formed a group called Fight For Our Funds , which has grown to 3,454 members who say they've collectively lost more than $30 million. Their goal: to get attention from the media and, hopefully, politicians. After logging on to Evolve’s website to check his balance, Jacobs found just $128.68 of the $94,468.92 he’d deposited. A sobering wake-up call. Promises vs. Reality: FDIC Insurance Doesn’t Cover This FDIC Insurance Doesn’t Cover This The most crushing part of the crisis? Many customers believed their funds were protected. Yotta and similar fintechs marketed themselves with the FDIC insurance label, a badge that should guarantee protection for deposits up to $250,000. In reality, the FDIC's rules don’t cover companies like Synapse, and customers didn’t have direct relationships with Evolve Bank, which made it easy for the funds to vanish. Customers were led to believe that their accounts were as safe as traditional savings accounts—only to discover that in the world of fintech, "safe" is a relative term. Morris, speaking at a court hearing, summed it up perfectly: “We were assured this was just a savings account. We’re not gamblers, we’re not risk-takers.” The Blame Game: Banks Point Fingers, Customers Bear the Cost As the bankruptcy case drags on, banks and fintech firms are in full damage-control mode. Evolve Bank, one of the main players in the saga, says it has disbursed what funds it could to its clients. But the missing money? That's still anyone’s guess. “Where those funds went,” said an Evolve spokesperson, “is an important question—but we can't answer it.” Meanwhile, the fintechs, like Yotta, are pointing fingers back at Evolve. They claim the bank hasn’t been transparent about how it’s deciding payouts, adding more frustration to an already chaotic situation. And the regulators? They’ve been largely silent. The FDIC and Federal Reserve have made it clear that they’re not stepping in to cover the fallout. “We’re not responsible for nonbanks like Synapse,” the FDIC has said, essentially leaving customers to fend for themselves. The Fallout: Winners, Losers, and No Clear Answers The bankruptcy proceedings are not creating happy endings for most. Some people have received full refunds, but others are still left in limbo. One customer, Natasha Craft, a 25-year-old FedEx driver, has been locked out of her Yotta account since May. She’s received nothing, despite having a sizable deposit. Meanwhile, Andrew Meloan, a chemical engineer from Chicago, received $5 of the $200,000 he had deposited. For many, this isn’t just a financial loss; it’s a betrayal of trust in a system that was supposed to be a safe haven. The Clock Is Ticking As lawsuits pile up and regulators continue to play catch-up, the window for recovering these lost funds is rapidly closing. A judge handling the case, Judge Martin Barash, has expressed concerns about the lack of cooperation between the banks and fintechs involved. "If the banks can't sort this out voluntarily," he said, "it may not get sorted out at all." As the crisis continues to unfold, many victims are left asking the same question: Who’s responsible, and when will we get our money back? Unfortunately, for now, the answer is unclear—and that’s the scariest part.