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

submitted 1 day ago by shoulderoforion@fedia.io to c/technology@lemmy.world

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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.

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[–] TORFdot0@lemmy.world 10 points 12 hours ago (2 children)

Isn’t that what they signed up for when they put their money in a nonFDIC insured account?

[–] bitjunkie@lemmy.world 7 points 7 hours ago (1 children)

They changed to a cash sweep / brokerage model (not FDIC-insured at the individual account holder level) like 6 months before the bankruptcy. End users had to click a consent checkbox or the like and probably thought nothing of it.

[–] TORFdot0@lemmy.world 1 points 2 hours ago

That changes everything. That’s dirty pool, shouldn’t have been allowed by SEC/Fed or who ever their regulator was

[–] Fisherswamp@programming.dev 33 points 11 hours ago (1 children)

Read the article, and maybe don't be such a heartless bastard?

Several people CNBC interviewed said signing up seemed like a good bet since Yotta and other fintechs advertised that deposits were FDIC-insured through Evolve.

“We were assured that this was just a savings account,” Morris said during last week’s hearing. “We are not risk-takers, we’re not gamblers.”

[+] TORFdot0@lemmy.world -12 points 10 hours ago (2 children)

I realize that my comment does sound really harsh. And there definitely should be criminal penalties for falsely advertising that they were an FDIC covered institution and a best effort to return the funds

But (again I am being harsh again) there is risk in putting your money in a faceless app instead of a brick and mortar institution and there needs to be some personal accountability for making bad decisions

[–] qwioeue@lemmy.world 11 points 7 hours ago (1 children)

What do you say to those who use Wells Fargo (brick and mortar institution) and and screw you over by opening accounts on your behalf?

I've been using Ally (an online bank) for decades. They told me that they are FDIC insured (and they are), but I would never thought to go to FDIC gov website to double check their words. I bet most Americans don't do that. It is not a reasonable expectation.

I don't think these folks were making bad decisions. These folks were lied to and were robbed.

[–] Dkarma@lemmy.world -1 points 6 hours ago

This is not the same.

[–] zephorah@lemm.ee 2 points 5 hours ago

Exactly. I’m making my initial dealings with brick and mortar since there’s no telling whose at the other end of a strictly online deal. Ok, you exist. Cool. Now business as usual, non-NigerianPrince.