The SynapseFi mess — Vieje Piauwasdy

I’m unfortunately one of the thousands of users with money stuck due to the SynapseFi mess right now. I had some cash with a fintech neobank called Yotta which used Synapse as their BaaS provider. Unfortunately this is an ugly fintech mess that will result in millions of dollars being locked up until Synapse can figure things out.

In a nutshell, my understanding is as such:

Synapse is the Banking as a Service (BaaS) provider that builds the infrastructure to connect many fintechs to banks.
My fintech neobank Yotta used Synapse to connect to Evolve which is a bank.
Synapse filed for bankruptcy in 2023 and was going to be acquired by TabaPay, but that deal fell through earlier this month.
There is only a skeleton crew of 6 people at Synapse working now due to the bankruptcy.
Synapse has since cut-off any access from the fintechs to Evolve and is not longer processing transactions. Since Synapse effectively builds the piping and infrastructure from these fintechs to the banks, no one including myself can get their money out.
The FDIC cannot step in because this isn’t an issue of a bank going bankrupt. My money is supposedly safe with Evolve which is FDIC insured, but the piping is not broken to get the money out.

As of now, there does not seem to be a resolution in place. Synapse and Evolve are both blaming each other for the issues. The fintechs such as Yotta are blaming Synapse and Evolve.

Someone is going to have to step in and fix the mess to get users their money. While this is not a big deal for me, it appears that thousands of users relied on these fintechs as their primary banking solution for direct deposit, paying bills, etc.

People are asking if this is fintech’s FTX. There’s already a chain reaction of other fintechs also shutting down because of this. For everyone’s sake and for the sake of the industry, let’s all hope that this gets resolved as soon as possible.