Yotta CEO unintentionally locks 85,000 customer accounts due to banking partner dispute.

From CNBC: 2024-06-01 08:00:01

Adam Moelis, co-founder of Yotta, unintentionally causes deep financial pain for 85,000 customers with $112 million in savings. Dispute between Yotta’s banking partners, Synapse and Evolve Bank, leads to accounts being locked. Regulators have not intervened as the disruptive fallout continues.

The collapse of Synapse, a key player in the fintech industry, has impacted numerous consumer fintech startups. Yotta, Juno, and Copper are among the companies freezing customer accounts. With at least 200,000 locked accounts, the situation highlights the risks in the “banking as a service” model amid increasing regulatory scrutiny.

Moelis anticipates potential relief after Jelena McWilliams is named trustee over Synapse bankruptcy. Efforts are being made to return funds to end users amidst the ongoing dispute between Synapse and Evolve Bank. The fallout underscores the need for regulatory oversight and risk management in the fintech industry.



Read more at CNBC: Yotta CEO says 85,000 bank accounts locked