Evolve Bank & Trust began reconciling accounts last week for customers impacted by the Synapse bankruptcy, and many are underwhelmed by payouts that are pennies on the dollar.

Some consumers – not just direct customers of Evolve or Synapse, but of fintech partners like Yotta and Juno, which held their funds in Evolve and used Synapse as the conduit – believe they’ve lost their life savings after the bank’s reconciliation process found them paltry sums, like $0.84 on $10,328 and $9.01 on $28,660, according to customer screenshots provided to Banking Dive.

The collapse of the Synapse ecosystem this spring froze customer funds of several fintechs, held at the firm’s four main partner banks and in a sweep network of other financial institutions.

According to Synapse CEO Sankaet Pathak and information shared on Yotta’s website, Evolve is the final piece of the reconciliation puzzle – but with the payout shortfall, fingers are pointing every which way as customers ask, “Where is my money?”

Savings goals

Week by week for four years, Leticia Barros transferred a percentage of her paycheck into Yotta with her heart set on one day owning a home.

At $17 an hour, it was a slow process. But over time, her account swelled to nearly $27,000 – a reasonable down payment – and a charming fixer-upper in Brattleboro, Vermont called her name.

But the money wouldn’t go toward her first house, and would instead be inaccessible for months – thus far, six – following the April 22 bankruptcy of Yotta’s bank partnership middleman Synapse, and Evolve’s subsequent freezing of withdrawals through Yotta on May 11.

To make the down payment on her home, Barros and her boyfriend had to take out a loan from his 401k; and to add insult to injury, she lost her project manager job for several months shortly thereafter. In short, money’s tight.

It’s tight, too, for Abby Harding, a video game artist based in Austin who’d managed to save $25,000 in her Yotta account. It was part emergency fund, part surprise college fund for her kid sister.

“I’d made a plan, because I’d just gotten out of college too, that as soon as I got a big girl job, I could finally help my little sister,” Harding said. “We don't come from a wealthy family, and I'm an artist, and she wants to be an artist, too.”

The shock of loss – Harding received $0.00 from Evolve in its reconciliation – came when she tried to tap into her Yotta account when her cat needed emergency surgery.

Funding the procedure from her checking instead set her on a paycheck-to-paycheck path, which she’s not yet managed to get off.

“It’s frustrating because I could afford the surgery with the funds in Yotta,” she said.

Barros said the most difficult part of her own loss is that she can’t share her experience with anyone, lest they chastise her.

“You can’t even [talk to people about it] because they blame you for being innocent and naïve and putting your money in ‘not a real bank,’” Barros said. “Everybody that did this, we’re not stupid. [Evolve] was insured. I really thought I was safe.”

Charged up by collective losses, end users who feel they’re being stiffed by someone – though due to conflicting messaging by Evolve and Synapse, they’re not exactly sure who – are geared up to fight.

They’ve appealed their reconciliations with Evolve. They’ve contacted lawmakers. They’ve filed claims with the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau, and the bank’s primary regulator, the Federal Reserve Bank of St. Louis.

Users have been active during routine bankruptcy hearings, asking executives directly what’s being done to get their money back. They’re pulling no punches – calling out inconsistencies in court, like when Evolve attorney Aravind Swaminathan contradicted prior claims that Evolve’s reconciliation process would determine not just how much money Evolve held, but how much partner banks held as well.

“Out of principle. I'm just not gonna let this go,” said Ben Goodman, a Juno customer and certified public accountant whose roughly $155,000 house fund now seems largely lost after Evolve reconciled his account for $41,000.

He intends to take legal action if he doesn’t get every dollar of his savings back. It’s likely that he won’t have to go it alone.

Saving the group

Jilted Yotta users’ public square has been, for the last six months, the r/yotta subreddit, a topical message board within the broader Reddit site. Juno users have joined, too. They’ve taken solace in one another regarding losses, discussed legal options available to them, and encouraged one another to mobilize by contacting lawmakers, regulators and the firms involved.

But subreddits, or topical message boards within the broader Reddit site, are moderated by people; and the r/yotta subreddit has a single moderator known only by their username, MiddleLevels.

Yotta customer Zach Jacobs, concerned about what he described as “a single point of failure,” created a spreadsheet for people to catalog their losses off of Reddit, and gathered a board of five others – to guard the data, and to keep up a shared momentum, with the intention of, if necessary, taking legal action.

Thus far, more than 900 people have accessed the spreadsheet.

“I want to make sure that if I step in front of a bus tomorrow, that everything keeps going and there's nothing lost,” said Jacobs, a small business owner who received $128 of his $94,468 Yotta balance in Evolve’s reconciliation payout.

The board also created a website, fightforourfunds.org, which features a highly detailed coordinated outreach schedule for users to move as a bloc: On Monday, users were instructed to file complaints against the involved banks – Evolve, Lineage Bank, AMG, and American Bank NA – with the Federal Reserve.

“It’s important we all file on the same day for maximum impact,” the website reads. It estimates the time required to do so at 12 to 15 minutes.

On Wednesday, users are instructed to attend a Synapse bankruptcy hearing. On Thursday, they’re to file complaints with the Financial Industry Regulatory Authority; and on Nov. 18, they’re to file complaints with the Federal Bureau of Investigation.

Jacobs has talked to attorneys. Many users have. But they’re wary of the limits lawyering up puts on what one can say, so it’s far from step one.

“Step one is [an] attack plan of what government entities and regulatory bodies to go after to apply enough pressure in hopes that there's so much fire raining down on the banks that it's less painful to pay us,” he said.

Blame game

Evolve alleges that the issue arose entirely from inaccuracies on Synapse’s ledger, and Pathak said they stemmed from Evolve’s tech issues. Yotta, in its September lawsuit against Evolve, alleged that the bank had a known shortfall long before Synapse’s bankruptcy.

Evolve declined to comment further on the reconciliation issues, and Pathak directed Banking Dive to information he shared on the accounting shortfall.

Yotta alleged on its website Monday that Evolve has refused to provide data related to Evolve’s purported payments and Synapse ecosystem balances, therefore making it “impossible” for Yotta to support end users and provide data to the courts and regulators. Yotta has requested end users provide information on their payouts directly to the firm.

In a statement to Banking Dive, a Yotta spokesperson noted that it “never held funds and never sat in the flow of funds” and that it “worked with member FDIC banks.”

“The Synapse bankruptcy is not the problem. The problem is the reported shortfall, which Evolve acknowledged they've known about since at least September 2023 but never told us. We believe they are using the bankruptcy as an excuse not to pay users what they’re rightfully owed," the spokesperson said.

At this juncture depositors aren’t sure who to blame, but it’s spread out amongst all players. A San Francisco tech worker who spoke on the condition of anonymity thinks it in some part falls on Yotta, since that’s who he had a relationship with.

Jacobs, referencing screenshots of Yotta’s pre-May messaging, with phrases like “Banking for Winners” and “Risk free, FDIC insured,” said the same.

It was Evolve, though, that Jacobs directly sent his money to, according to his bank records, $10,000 at a time. And it’s Evolve that, according to Jacobs, says it has no record of him as a customer.

“The bad guy changes every month or so,” he said.

Two customers feel at least some blame lands on influencer Graham Stephan, who heavily promoted Yotta on his YouTube channel, including one video titled “I Just Bought a Bank.” Stephan, who appears to have erased references to Yotta on his platform, did not respond to a request for comment from Banking Dive.

As end users await their money, accusations continue to move between the bank, middleware and fintechs.

Goodman told Banking Dive that his biggest question is, “Where are the regulators? What are they doing?”

In response to a filed complaint, the St. Louis Fed reached out to him for more information on the money he had in his account and the money he has yet to get back. But after he responded, it was radio silence on the Fed’s end, he said.

The St. Louis Fed declined to comment further on the matter.

In a letter to Synapse’s bankruptcy trustee and former FDIC Chair Jelena McWilliams, Mark Van Der Weide of the St. Louis Fed noted the complexity of funneling funds back to individual end users when their money had been held in large accounts intermingled together, which is a common system among bank-fintech partnerships.

Van Der Weide expressed “sincere concern” and wrote that the Fed would continue to monitor Evolve’s progress in returning customer funds.

But six months after his funds were frozen, Jacobs has one big takeaway.

“We have thousands of people who have literally been robbed of their life savings in front of a court, in front of government officials, in front of every regulatory body that regulates the [companies] involved. Every one of them – FINRA, the SEC, the CFPB – have watched thousands of people lose their life savings, and not a single person has come to help,” he said. “The takeaway is, if it's not Chase or Wells Fargo or Bank of America, [money] could disappear, and no one's coming to help.”