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Synapse still can't find its money

bloomberg.com

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Re: Synapse still can't find its money

#51

Post by lxgr »

lesuorac wrote: post #16
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.

Paying _who_ out? Yotta is who the people gave their money to. Yotta then used Synapse (which went bankrupt) to actually deposit the money into not-per-user accounts at 4 different banks. As-in, if you had an account with Yotta your money would be co-mingled with thousands+ other individuals into a singular Evolve account. Evolve has no proof that your money is within the account Synapse held with them. As-in your mo…

> This is why not only does your broker not hold your stocks for you, they also tell the holding company who owns them.

Are you sure about that?

I believe modern common practice in the US and many other countries is for the stock to be held by the depository in the brokerage name (which is referred to as "street name" ownership), and only the brokerage to have customer-level records.

Re: Synapse still can't find its money

#52

Post by AyyEye »

neilv wrote: post #49

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…

I was likewise looking for it again to no avail. It showed up in search.

Re: Synapse still can't find its money

#53

Post by neilv »

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?

All of them, and the founders, officers, and investors, personally?

Re: Synapse still can't find its money

#55

Post by from-nibly »

Workaccount2 wrote: post #8

I'm sure FDIC will come around at some point and bail out the average folks who got wiped here. Just like they bailed out the totally average definitely not rich people/corporations who got wiped by SVB collapsing. Right guys? Right?

Another reason why this probably wont happen is that the government bails out banks beyond the FDIC insurance when people lose faith in the ponzi scheme that is the us banking system.

Since the government can clearly point out that these companies were not banks they can just say, "look at these idiots who didn't put their money in a bank" and they have solidified confidence in the banking system EVEN MORE

Re: Synapse still can't find its money

#57

Post by lesuorac »

lxgr wrote: post #51
lesuorac wrote: post #16

Earlier quoted context omitted.

Paying _who_ out? Yotta is who the people gave their money to. Yotta then used Synapse (which went bankrupt) to actually deposit the money into not-per-user accounts at 4 different banks. As-in, if you had an account with Yotta your money would be co-mingled with thousands+ other individuals into a singular Evolve account. Evolve has no proof that your money is within the account Synapse held with them. As-in your mo…

> This is why not only does your broker not hold your stocks for you, they also tell the holding company who owns them. Are you sure about that? I believe modern common practice in the US and many other countries is for the stock to be held by the depository in the brokerage name (which is referred to as "street name" ownership), and only the brokerage to have customer-level records.

https://www.investopedia.com/ask/answers/185.asp

> That doesn't mean the investor doesn't own the securities it bought. It's just a formality. As part of the process, the broker will assign all ownership rights to the investor by registering the client as the beneficial owner.

There was a quip about this in one of the moneystuff or bitsaboutmoney but not too sure which one.

Re: Synapse still can't find its money

#58

Post by jitl »

bryan0 wrote: post #32
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.

If you have a million dollars and accrue a debt of $500,000 you are solvent. If you have $20,000 and accrue a debt of $500,000, you are bankrupt and your debtors take a big loss and everyone is sad.

(Also presumably if you have a bunch of money you did get it somehow…)

Re: Synapse still can't find its money

#59

Post by fragmede »

gethoht wrote: post #56

I'm looking to immediately withdraw all of my funds from wealthfront and put them into fidelity.

fyi Fidelity is also not a bank. They might be older, but they're just as much not a bank as Betterment or Wealthfront. Wealthfront gives you a statement from Green Dot, which is actually a bank. Charles Schwab and Chase are actual banks as well. Robinhood should not be trusted with more than beer money.

Re: Synapse still can't find its money

#60

Post by bdangubic »

jitl wrote: post #58
bryan0 wrote: post #32

Earlier quoted context omitted.

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.

If you have a million dollars and accrue a debt of $500,000 you are solvent. If you have $20,000 and accrue a debt of $500,000, you are bankrupt and your debtors take a big loss and everyone is sad. (Also presumably if you have a bunch of money you did get it somehow…)

$20k with $500k debt is a whole lot of airbnb enterprenuers racking in serious dough.

debt is a great thing as long as you make money from that debt (you don’t pay taxes on the debt either) :)

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