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.

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.

  • 2001aCentenaryofFederation@fedia.io
    65·
    7 days ago

    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?

    • comador @lemmy.world
      57·
      7 days ago

      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.

      • schizo@forum.uncomfortable.businessEnglish
        81·
        7 days ago

        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.

    • Iheardyoubutsowhat@lemmy.worldEnglish
      45·
      7 days ago

      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.

        • Iheardyoubutsowhat@lemmy.worldEnglish
          5·
          7 days ago

          Because they said they were, or implied it. I would not have opened a savings account had they not been.

          In theory, these people’s money isn’t gone, it’s just misplaced into other banks if I understand correctly…and none of these entities want to pay for a full audit because of cost and probably, liability.

          The banks that actually hold the money are FDIC insured, but Yotta is not it seems. The way it’s worded it makes it look like Yotta is.

          • jagged_circle@feddit.nlEnglish
            2·
            6 days ago

            Yeah my understanding is they’ll get their money back then

            Update: oh, well not if the fintech org didn’t actually put your money in those banks lol