Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Synapse still can't find its money

bloomberg.com

Post reply on HN
Print view View original

41–50 of 75 posts

Re: Synapse still can't find its money

#41

Post by lxgr »

scripturial wrote: post #38
lxgr wrote: post #33

Earlier quoted context omitted.

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.

That's exactly what I'm getting at. You'll want one layer in charge of ensuring consistency and authentication of incoming write requests.

This can be, but definitely doesn't have to be, a typical relational database in conjunction with a core banking system.

Re: Synapse still can't find its money

#42

Post by masfuerte »

rossdavidh wrote: post #9
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…

If I understand it correctly, the bank had an account in which Synapse put money. The bank knows how much money Synapse had in its account. This is all that the bank was responsible for. The people who were customers of Synapse's customers, were three levels removed from the bank. I am neither a lawyer nor an accountant, this is just my understanding of the article.

I found an interview with the founder of Synapse and the setup was more complicated than that. It seems that client transactions were happening directly on the bank and the bank was notifying Synapse who were then updating their client balances.

If the bank screwed up this notification process then Synapse didn't necessarily know about it until the customers started complaining.

The notification process was some janky thing involving text files, cron and sftp and frequently failed. Sometimes it didn't work at all (which Synapse would spot) but sometimes it just omitted loads of transaction records.

And it gets worse from there with the bank allegedly pulling various shenanigans and Synapse being blissfully unaware.

I don't see how you can run a finance business when you have no oversight or control over what's happening.

https://lex.substack.com/p/podcast-what-really-happened-at-s...

Re: Synapse still can't find its money

#43

Post by Terr_ »

throwup238 wrote: post #17
Terr_ wrote: post #4

"We don't know exactly which customer's money went into which bank(s)" gets a bit more spicy when you add the fact all the customers put in $265m and the real-banks only seem to have $180m of it, and AFAIK nobody has a clear explanation for the missing $85m. (~32%) P.S.: I also find it amusing that they stored+hosted their financial ledger using MongoDB. Not that you can't commit massive financial mismanagement with…

> P.S.: I also find it amusing that they stored+hosted their financial ledger using MongoDB. Not that you can't commit massive financial mismanagement with any tool, but I was not a fan of the "NoSQL" evangelism of the 2010s. Embezzlement is finally web scale! [1] [1] https://youtube.com/watch?v=b2F-DItXtZs

Oh, embezzlement was always web-scale: No constraints, no redundancy, no logging, preferably no transactions...

Re: Synapse still can't find its money

#44

Post by rvba »

scripturial wrote: post #20
Terr_ wrote: post #4

"We don't know exactly which customer's money went into which bank(s)" gets a bit more spicy when you add the fact all the customers put in $265m and the real-banks only seem to have $180m of it, and AFAIK nobody has a clear explanation for the missing $85m. (~32%) P.S.: I also find it amusing that they stored+hosted their financial ledger using MongoDB. Not that you can't commit massive financial mismanagement with…

I wonder if use of MongoDB creates a legal liability. I’m not up to date on the architecture of MongoDB but I am under the impression that it couldn’t be reliably used for this kind of thing? (The problem here is not nosql, I believe you can do reliable accounting with ScyllaDB and Cassandra as long as you design things correctly. Basically only ever allow append/add but never allow update/delete. I’m not sure if thi…

Ah time to repost the classic:

https://stackoverflow.com/questions/16833100/why-does-the-mo...

Re: Synapse still can't find its money

#45

Post by Kkoala »

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.

Not necessary or sufficient, but with append only model you can at least trace back what has happened if/when something goes wrong

Re: Synapse still can't find its money

#46

Post by tdeck »

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?

If it were me I would pick the one that I had the direct business relationship, or failing that the one that is solvent. But the strategy is specifically banking on the fact that small claims court is more favorable to individuals without legal training than other courts are, and the dollar amount isn't worth the company sending someone to fight over it.

Re: Synapse still can't find its money

#47

Post by lxgr »

Kkoala wrote: post #45
lxgr wrote: post #33

Earlier quoted context omitted.

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.

Not necessary or sufficient, but with append only model you can at least trace back what has happened if/when something goes wrong

Sure, but you can have your append only layer be provided by a core banking system, and have your applications communicate with that using a higher-level protocol.

I don't see what would inherently disqualify Mongo from being the backing layer for that core banking system then.

Re: Synapse still can't find its money

#48

Post by duxup »

masfuerte wrote: post #42
rossdavidh wrote: post #9

Earlier quoted context omitted.

If I understand it correctly, the bank had an account in which Synapse put money. The bank knows how much money Synapse had in its account. This is all that the bank was responsible for. The people who were customers of Synapse's customers, were three levels removed from the bank. I am neither a lawyer nor an accountant, this is just my understanding of the article.

I found an interview with the founder of Synapse and the setup was more complicated than that. It seems that client transactions were happening directly on the bank and the bank was notifying Synapse who were then updating their client balances. If the bank screwed up this notification process then Synapse didn't necessarily know about it until the customers started complaining. The notification process was some jank…

> The notification process was some janky thing involving text files, cron and sftp and frequently failed. Sometimes it didn't work at all (which Synapse would spot) but sometimes it just omitted loads of transaction records.

What the hell…

I’d seriously question the bank that thought that was ok.

When I worked with big banks long ago that kind of thing would be shocking.

Re: Synapse still can't find its money

#49

Post by neilv »

I briefly saw this HN post on the front page, but when I came back to look for it, shortly after, couldn't find it in the first 25 pages of HN.

> Synapse still can't find its money (bloomberg.com) 28 points by ekpyrotic 2 hours ago | unvote | flag | hide | past | favorite | 43 comments

I did find two other stories:

> 154. Americans see their savings vanish in Synapse fintech crisis (cnbc.com) 246 points by hunter2_ 2 days ago | flag | hide | 237 comments

> 163. Synapse debacle cost some users their life savings (axios.com) 18 points by toomuchtodo 4 hours ago | flag | hide | 10 comments

Re: Synapse still can't find its money

#50

Post by duxup »

ajross wrote: post #34
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 S…

It’s not clear to me if the banks are in the clear yet.
Post reply on HN