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'I have no money': Thousands of Americans see their savings vanish in Synapse fintech crisis (www.cnbc.com)

submitted 14 hours ago* (last edited 14 hours ago) by [email protected] to c/[email protected]

30 comments fedilink hide all child comments

KEY POINTS

Thousands of Americans will receive little or nothing from savings accounts that were locked during the collapse of fintech middleman Synapse.
Customers believed the accounts were backed by the full faith and credit of the U.S. government.
CNBC spoke to a dozen customers caught in the predicament, people who have lost sums ranging from $7,000 to well over $200,000.
While there’s not yet a full tally of those left shortchanged, at fintech Yotta alone, 13,725 customers say they are being offered a combined $11.8 million despite putting in $64.9 million in deposits.

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[–] [email protected] 8 points 5 hours ago

Honestly I have a lot of sympathy for these people.

It's one thing to invest in some moonshot crypto. It's another to invest in something claiming to be FDIC insured. There's also not a good way of verifying that information to the extent the victims would have needed to know something was amiss.

It seems like the FDIC was asleep at the wheel, and didn't really know or give a shit that someone was leveraging them to mislead consumers. Instead of actually fixing the problem, they just washed their hands of it.

You can call Trump the devil all you want, but the system was broken long before he came on the scene.

[–] [email protected] -5 points 6 hours ago

Womp womp.

[–] [email protected] 27 points 12 hours ago (2 children)

This sucks big time. Real question, what motivated people to put huge sums of money into a startup company? Some deal on a loan?

[–] [email protected] 19 points 9 hours ago (1 children)

I believe they were told that it was FDIC insured.

[–] [email protected] 3 points 7 hours ago (1 children)

Regardless though. What’s the the incentive of some new app over a bank or some already known app?

[–] [email protected] 5 points 7 hours ago (1 children)

Interest rates. Then again, you can go for other more reputable brands that have good interest rates. I was making around 5% with Vanguard cash plus for some time. It's based on money market though, so as federal interest rates went down, so did the rates for that account. There are smaller companies with slightly better rates, but IMO Vanguard is way more trustworthy than all these new Fintech startups and I know the FDIC insurance is legit.

[–] [email protected] 2 points 6 hours ago

Yes I agree. I was thinking of switching from my current bank to one that had a 5% interest for my emergency fund but it's a new bank to me. I didn't recognize the name. Decided not to do it because I don't know who they are. I'm referring to Openbank.

[–] [email protected] 8 points 11 hours ago (1 children)

not a huge sum, but I had $10k in it, because it was a fun bullshit app that scratched the lottery itch despite it earning less than regular interest over my time with it

[–] [email protected] 3 points 7 hours ago (1 children)

What was the lottery aspect? Damn $10k to just play with. That’s a different kind of life.

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

Isn't $10k like one months mortgage on a house in the bay area? And just swing by vegas... plenty of people spending that kind of money. It may seem like a different kind of life, but often it is just a different location. They often live a lot like the rest of us... thier emergency fund might last 2 months instead of one, but they are still pretty close to broke if they lose thier job. When someone starts dropping $100k... that is a different life.

[–] [email protected] 10 points 13 hours ago (1 children)

Curious why law enforcement wouldn't be involved in this. Sure smells like a Madoff like thing in the background.

[–] [email protected] 12 points 11 hours ago (1 children)

Seems like the sort of thing the SEC might investigate.

Who knows what investigations are going on. They don't always put out a press release at the start of every investigation.

[–] [email protected] 3 points 10 hours ago

Maybe. But you'd think the reporter might ask some of the relevant agencies. Or the victims they interviewed might mention it.

[–] [email protected] 72 points 14 hours ago (2 children)

I'm sorry this happened. I'm concerned that further deregulation and dismantling of consumer or protections will make this even worse.

[–] [email protected] 6 points 14 hours ago

Why are you WORRIED about FURTHER Deregulation of your Money so that THIS EXACT SCENARIO can Happen to you too? You must be a SOCIALIST! I cant WAIT for Trump to Deregulate my Money so Banks can LOSE it All!

[–] [email protected] 56 points 14 hours ago (1 children)

Good news, there will be an absolute fuck-ton of further deregulation and dismantling of consumer protections over the next four years!

[–] [email protected] 18 points 13 hours ago (2 children)

Four? Hah… you make me laugh. He’s never leaving

[–] [email protected] 3 points 6 hours ago

Feet first and hopefully in fewer than 4 years

[–] [email protected] 15 points 13 hours ago (1 children)

He's an old man. Unless anti-aging research unexpectedly advances several orders of magnitude faster than its been doing in the next few years, he'll be leaving office one way or another.