You put money in a fintech app. The app said "FDIC insured." Then Synapse — the middleware connecting the app to the actual bank — went bankrupt. $85 million in deposits disappeared. Users couldn't access their money for months. FDIC insurance covers the bank. Nobody insures the middleware. Your "bank" was a UI on top of a startup, and the startup went under. Your fintech app looked like a bank. It wasn't. It was a skin on Synapse, which was a middleware to Evolve Bank. When Synapse went bankrupt, the records of who owned what went with it. Users had no direct relationship with the actual bank. $85 million in deposits, belonging to people who couldn't prove the money was theirs, because the middleman who kept the records no longer exists.
What they claim: Synapse powered fintech apps that marketed themselves as banks with FDIC insurance
What we found: Synapse Financial Technologies — the middleware connecting fintech apps like Yotta, Juno, and Copper to actual banks — filed for bankruptcy in April 2024. Approximately $85 million in customer deposits went missing. Users of fintech apps built on Synapse could not access their money for months. The FDIC insurance they were promised covered deposits at the underlying bank, not losses from middleware failure. The intermediary collapsed, and nobody knew who owed what to whom.
What they claim: Fintech apps built on Synapse presented themselves as independent financial products
What we found: Users of Yotta, Juno, and Copper had no idea their money was routed through Synapse. The app looked independent. The brand was the only thing the user saw. When Synapse collapsed, users discovered they had no direct relationship with the underlying bank (Evolve Bank & Trust). Their money was in a pooled account, and the records of who owned what were maintained by Synapse — the company that just went bankrupt.