Nearly $109M in Yotta customer deposits vanish
From CNBC: 2024-06-21 12:16:58
Ledgers of the failed fintech middleman Synapse show that nearly all deposits for customers of the app Yotta went missing, totaling $109 million held by eight banks. Major discrepancies in funds led to over 100,000 fintech customers locked out since May 11th. Evolve Bank reprimanded by the Federal Reserve for unsafe practices. Yotta CEO and Synapse in disagreement over frozen accounts.
Hesitation to unfreeze locked accounts due to discrepancies in ledgers – full reconciliation is required. Synapse moved funds to banks in late 2023, complicating matters. Trustee unsure if reconciliation to the last dollar is possible. Shortfall amounts owed to depositors range from $65-$96 million, causing long-lasting chaos for customers.
Thousands of Yotta customers left in financial limbo. Trustee pleads with regulators for assistance in Synapse collapse, highlighting devastating impact on end-users inability to pay for basic living expenses. McWilliams to present status report in bankruptcy case, seeking prompt involvement from agencies to aid communication with banks and customers.