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Synapse still can't find its money

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Re: Synapse still can't find its money

#31

Post by tdeck »

dangrossman wrote: post #27

I followed the "Launch HN" of Yotta 4 years ago and deposited some money. Evolve Bank says "we have determined that we are not holding your funds and you will not be receiving a payment from Evolve" (reconciliationbyevolve.com) Yotta customer support says "According to the Synapse Trial Balance Report, your funds are with Evolve Bank & Trust". It doesn't appear I'll ever be getting that money back. It's not enough th…

Probably not worth it but if it's less than about $5k you may be able to sue in small claims court. It's unlikely the bank will even show up and in that case you would win by default. Collection might be a challenge though.

IANAL.

Re: Synapse still can't find its money

#32

Post by bryan0 »

rootusrootus wrote: post #11

The feds need to come crashing down on operations like this. Perhaps you should need to be an accredited investor before you can put your $280K nest egg into a poorly regulated not-bank offering 'prize linked savings' accounts.

The “accredited investor” thing always seemed like a scam to me. Like if you have a lot of money we will trust that you know how to invest, otherwise we won’t let you.

Re: Synapse still can't find its money

#33

Post by lxgr »

scripturial wrote: post #25
lxgr wrote: post #23

Earlier quoted context omitted.

Where did you get the idea that “append only” needs to necessarily be implemented at the database layer?

No one said that. The point is it’d be hard to loose data with Scylla as long as your only ever appending to the physical tables. I don’t know if MongoDB has this same attribute.

No idea, but why would that be necessary or sufficient to make it very unlikely to lose data?

Things can go wrong on many layers above and below the database, so the property you describe seems like an implementation detail of one particular approach, not something fundamentally necessary for sound bookkeeping.

Re: Synapse still can't find its money

#34

Post by ajross »

duxup wrote: post #5

About the Synapse situation >As a result, the partner banks and fintechs were all reliant on Synapse to determine how much each customer was owed at all times. I don’t understand how a partner bank would… want to do this? As a bank knowing your numbers and who you owe seems like a fundamental function, why would you leave that to some middle man and some strange portal? How do you know they don’t just suddenly say yo…

> It sounds like a big risk for a bank….

On the contrary, the banks aren't on the hook here! If they have a clear answer for "Yes, this customer's money is with you", then they pay. If not, they sit on the funds until some court orders them to do something with them.

The banks are winning big time here. It's their customers who eat the risk.

Ultimately the source of the loss is going to turn out to be some fraud at Synapse that caused their bankruptcy, but it seems like no one has details on that yet. But until then, the banks are sitting on unowned/untraceable free cash. They're loving this deal.

Re: Synapse still can't find its money

#35

Post by hipadev23 »

tdeck wrote: post #31
dangrossman wrote: post #27

I followed the "Launch HN" of Yotta 4 years ago and deposited some money. Evolve Bank says "we have determined that we are not holding your funds and you will not be receiving a payment from Evolve" (reconciliationbyevolve.com) Yotta customer support says "According to the Synapse Trial Balance Report, your funds are with Evolve Bank & Trust". It doesn't appear I'll ever be getting that money back. It's not enough th…

Probably not worth it but if it's less than about $5k you may be able to sue in small claims court. It's unlikely the bank will even show up and in that case you would win by default. Collection might be a challenge though. IANAL.

Who are they going to sue? Yotta? Synapse? Evolve?

Re: Synapse still can't find its money

#37

Post by hipadev23 »

ctbeiser wrote: post #13
rootusrootus wrote: post #11

The feds need to come crashing down on operations like this. Perhaps you should need to be an accredited investor before you can put your $280K nest egg into a poorly regulated not-bank offering 'prize linked savings' accounts.

The accounts were genuinely FDIC insured. Evolve is a real bank. But a few months before the bankruptcy, Evolve pushed Synapse to move the money into non-FDIC insured brokerage accounts. As far as I can tell, this was: - a way to move a hole in the balance sheet from an FDIC insured to an uninsured place - completely illegal, insofar as the only user consent was a manual opt-out, and some users weren't even sent emai…

> Evolve pushed Synapse to move the money into non-FDIC insured brokerage accounts

Where can I read more?

Re: Synapse still can't find its money

#38

Post by scripturial »

lxgr wrote: post #33
scripturial wrote: post #25

Earlier quoted context omitted.

No one said that. The point is it’d be hard to loose data with Scylla as long as your only ever appending to the physical tables. I don’t know if MongoDB has this same attribute.

No idea, but why would that be necessary or sufficient to make it very unlikely to lose data? Things can go wrong on many layers above and below the database, so the property you describe seems like an implementation detail of one particular approach, not something fundamentally necessary for sound bookkeeping.

I am not sure where the disconnect is. Having a database that can provide a permanent unalterable record of all transactions, even when running over a distributed network, seems reasonably important to me.

Are you saying it’s just as good to do this in the application layer? I respect that’s a possible option. Not sure I agree it’s a good option.

Re: Synapse still can't find its money

#39

Post by lostmsu »

gwbas1c wrote: post #7

> In June, the FDIC made it clear that its insurance fund doesn’t cover the failure of nonbanks like Synapse, and that in the event of such a firm’s failure, recovering funds through the courts wasn’t guaranteed. It seems they should be able to sue Evolve (the bank), given that they money is there, and there's proof that the money's there. IE, the risk of 3x damages should be enough to scare the bank into paying out.

>> In June, the FDIC made it clear that its insurance fund doesn’t cover the failure of nonbanks like Synapse, and that in the event of such a firm’s failure, recovering funds through the courts wasn’t guaranteed.

Sounds like this would apply to other non-banks like Mercury.

Re: Synapse still can't find its money

#40

Post by QuadmasterXLII »

hipadev23 wrote: post #35
tdeck wrote: post #31

Earlier quoted context omitted.

Probably not worth it but if it's less than about $5k you may be able to sue in small claims court. It's unlikely the bank will even show up and in that case you would win by default. Collection might be a challenge though. IANAL.

Who are they going to sue? Yotta? Synapse? Evolve?

Typically you just sue all three, which is called joinder. However this may be out of scope for small claims. Practically, banks and insurance companies seem to be immune to lawsuits, so I would put the odds of this working at very, very low, whereas if a ycombinator meal prep startup intentionally poisoned you I would expect a lawsuit to get through much more often: somewhere on the order of magnitude of half the time.
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