Earlier quoted context omitted.
Who are they going to sue? Yotta? Synapse? Evolve?
All of them, and the founders, officers, and investors, personally?
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Synapse still can't find its money
61–70 of 75 posts
Re: Synapse still can't find its money
#62Earlier quoted context omitted.
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…
and this is why I insist on still having paper bank statements when the k8s+mongodb "non-legacy" tech stack implodes at least I have a physical document the bank produced that the court can understand
Or at the least, download PDF statements every month. I fear that if too many people don’t do that, eventually they’ll remove that feature due to low demand.
Re: Synapse still can't find its money
#63> 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.
Yes. Mercury, which is not a bank and has never publicly claimed that it plans to become a bank, is reportedly trying to recover $30 million in missing customer funds from Synapse: https://www.forbes.com/sites/emilymason/2023/12/20/with-syna...
I've held a (trivial) business account at Mercury since before Synapse collapsed. Mercury has never attempted to notify me about missing customer funds, potential customer losses, or the lawsuit stemming from the collapse of their banking partner.
Re: Synapse still can't find its money
#64Earlier quoted context omitted.
> 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.
You definitely do own them in a legal sense, but in a bookkeeping sense, there is a very real difference between the depository and your broker maintaining ownership records.
Legal ownership is what makes your claims worth anything in a court of law, and protects them against those of other creditors, but without proper bookkeeping, you have no evidence a court could even consider.
Re: Synapse still can't find its money
#65Earlier quoted context omitted.
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.
Really?
Definitely heard people in the banking area talk about how you just take money from other peoples accounts and if that person disputes it their bank then uploads a file over FTP and if a file never shows up then your bank should assume (but not know) the transfer is valid.
Too bad the link rotted: https://news.ycombinator.com/item?id=7636066
Re: Synapse still can't find its money
#66Earlier quoted context omitted.
and this is why I insist on still having paper bank statements when the k8s+mongodb "non-legacy" tech stack implodes at least I have a physical document the bank produced that the court can understand
Or at the least, download PDF statements every month. I fear that if too many people don’t do that, eventually they’ll remove that feature due to low demand.
I would be ecstatic if my bank allowed me to generate (and revoke) a set of API credentials that were narrowly permitted to download transaction/statement data."
Alas, for many people the "workaround" is to put their credentials into a third-party service, and the fact that such things exist make me think I'm taking crazy-pills. [0]
Re: Synapse still can't find its money
#67Earlier 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
If they were recording all the necessary information there in the first place, anyway. The level of detail to replay or audit is usually higher than whats needed for direct operation, especially if some things go out through remote systems/accounts and back.
Re: Synapse still can't find its money
#68Earlier quoted context omitted.
> 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.
Really? Definitely heard people in the banking area talk about how you just take money from other peoples accounts and if that person disputes it their bank then uploads a file over FTP and if a file never shows up then your bank should assume (but not know) the transfer is valid. Too bad the link rotted: https://news.ycombinator.com/item?id=7636066
Doesn't ACH still use FTP?
Re: Synapse still can't find its money
#69I 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…
I know it wasn't a traditional bank, but when they start talking about "winning" $10 million and "picking your numbers", it sounds sooo sketchy... I can't imagine putting money into something like that. (excuse me while I go buy more DOGE coin...)
Re: Synapse still can't find its money
#70I'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.
All banks suck. But there's a lot to be said for longevity and experience. Also the number of program banks that actually work with Fidelity is pretty long: https://accountopening.fidelity.com/ftgw/aong/aongapp/fdicBa...