The slow-moving dumpster fire that is the Synapse-Evolve meltdown has turned into a nightmare for many fintech customers.
Synapse acted as a middleman between banks and fintechs, but there have been several disagreements between Synapse and these banks and fintechs. Consumers who assumed their money was safe are caught in the middle.
Synapse had contracts with 20 banks and around 100 fintechs with a total of 10 million end users. Many of these end users have been locked out from accessing their funds.
There are multiple stories of consumers with tens of thousands of dollars that they are unable to access. The money does not appear to be gone, only frozen in place, while Synapse works out its differences with one of its largest bank partners, Evolve Bank & Trust.
Hearings in Synapse’s bankruptcy case have been ongoing this week in California as the judge tries to understand a complex and messy situation.
It is not a good look for banking-as-a-service and for fintech in general. This needs to be resolved quickly, or we can expect policymakers to step in.
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> Fintech nightmare: ‘I have nearly $38,000 tied up’ after Synapse bankruptcy
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