Synapse still can't find its money
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Synapse still can't find its money
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Re: Synapse still can't find its money
#2Re: Synapse still can't find its money
#3"We closed our eyes while throwing money into a pit. Now we can't find it!"
Re: Synapse still can't find its money
#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 any tool, but I was not a fan of the "NoSQL" evangelism of the 2010s.
Re: Synapse still can't find its money
#5About 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 you owe more than you expect?
It sounds like a big risk for a bank….
Re: Synapse still can't find its money
#6About 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…
IANABanker but I suspect it was appealing for the 4 "real" banks because they barely had any work to do. From their perspective they had one single corporate customer called "Synapse" with an account that had a nice huge balance, and life was easy.
Contrast that to if the same sum was divided across thousands of individual accounts. Each would involve a certain amount of regulatory reporting, identity proof, pestering people to pick a beneficiary, monthly statements, etc. In addition there would need to be some way for Synapse to do deposits/withdrawals on the owner's behalf, and more of the sum would be FDIC insured meaning more money would be going out to the FDIC in insurance premiums.
Re: Synapse still can't find its money
#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.
Re: Synapse still can't find its money
#8I'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?
Re: Synapse still can't find its money
#9About 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.
Re: Synapse still can't find its money
#10I'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?
The problem here is knowing customer balances. A lot of the money is still out there, but it is not properly associated with any individuals so it's infeasible (at present) to get them back their money. Which is different than what FDIC is there for, which is to insure against a bank being unable to cover deposits, but balances have been properly tracked.
If Synapse (and apparently their partner Evolve) had been moderately competent at the job they set out to do, this could have been resolved a while ago. Instead the founder of Synapse is already off to a new venture and doesn't care about the people he screwed over, though I'm sure he feels bad when asked about it. Keep failing up.