U.S. Senators Urge Fintech Synapse To Give Users Access To Their Accounts

Photo by Vladimir Solomianyi on Unsplash

U.S. Senators Urge Fintech Synapse To Give Users Access To Their Accounts

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  • Andrea Miliani

    Written by: Andrea Miliani Tech Writer

  • Justyn Newman

    Fact-Checked by Justyn Newman Head Content Manager

On July 1st, four Senators of the United States—Sherrod Brown, Ron Wyden, Tammy Baldwin, and John Fetterman—shared an open letter urging the company Synapse’s owners, operators, and partners to restore users’ access to their accounts immediately.

The letter, shared publicly on Monday, was sent to major investors of the fintech company and partners; and was addressed to W. Scott Stafford, president and CEO of Evolve Bank & Trust. The list of recipients included American Bank, Juno, Yotta, Copper, AMG National Trust, and former Synapse CEO Sankaet Pathak.

“As you well know, many customers who entrusted their money to Synapse and its fintech and bank partners have been unable to access their money since mid-May,” stated the document, addressing the abrupt shutdown of Synapse services a few weeks ago. “To date, you have failed to provide them with a clear timeline for restoring access to their funds.”

Synapse acted as a middleman between fintechs and banks and the victims come from different organizations. According to CNBC, Synapse had contracts with more than 100 companies. Since the company declared bankruptcy and decided to suspend services on May 11, over 100,000 Americans have been locked out of their accounts, and the amount of money in their balances combined reached $265 million. The largest percentage of the customers, around 85,000, were from Yotta.

CNBC interviewed victims from different backgrounds and locations in the United States who had been using their fintech accounts for multiple purposes. A driver from Indiana now has her life savings—over $7,000—locked. A social worker from Seattle worries about the money she saved for dental work. Organizations, tech experts, and entrepreneurs were also affected.

The Senators expressed their concern for the “potential shortfall of $65 to $96 million between what consumers are owed and the funds held on their behalf by Synapse’s partner banks.” And added that the situation is “deeply troubling and completely unacceptable.”

Other Bank as a Service (Baas) are also being affected as Synapse’s case affects multiple fintech’s reputations. “For millions of customers, the rise in Fintech offers the best of both worlds, innovative banking and cutting edge tech come on with the safety of government backing with names like CashApp, PayPal, SoFi, and Stripe,” said a CNBC host reporting the story on video, “but the reality for some of those customers appears to be anything but safe and secure.”

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