People relied on accounts powered by Synapse for everyday expenses like buying groceries and paying rent, or for saving for major life events like home purchases or surgeries.
Gotta love US healthcare
this post was submitted on 22 Nov 2024
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Risky investment turns out to be risky. No one could have seen that coming.
If you see this as investment, the consider that investors were lied to (the startups claimed to have FDIC coverage) and didn't have accurate information to assess the risk.
when a bank is described as a "savings startup", you should run the other way screaming
The government should mandate warning labels on companies like that, maybe "fintech" would be a good word to force them to use, similar to the way large companies have to use the "enterprise" warning label and games companies have to be labelled "triple A" to know their products and services are low quality and have a high risk of failure.
Do you not have banking licenses? Over here, that's how you tell real (regulated and insured) banks from pretend banks.
I like your style
I'm not from the US so unfamiliar with any of this, but having followed the link to the Yotta website from the article, it is a... gambling site? What leap is missing that people would entrust their savings to gambling?
There was no interest on Yotta accounts. Originally, when you signed up, you were given a lottery ticket everyday for every 25$ in the account. There was a lottery everyday where you could win up to 25000. Then they switched to games where you essentially gambled with the tickets that were given based on your amount.
I was once a member but pulled the money when interest rates started to rise. I was lucky.
I'll also note, when signing up, I was given the impression this FDIC insured.
Might as well be a gambling site: It was a startup bank with no Federal backing (FDIC) that appears to have promised greater returns than traditional banks by investing your money and giving you some of the profits back from dividends.
Still, it was a startup that wasn't fully vested nor backed federally to secure people's deposits. Sad.
Wow. Stochastic interest payouts. Another lamentable perverted contribution coming from irresponsible MBA schools
The lie was WORSE than that.
A lot of the fintechs invovled actually told people their money was safe, because it was subject to "passthrough FDIC insurance", because their money was ultimately put in an insured bank, and thus was safe.
Problem is that's not how it actually worked, so basically everyone was straight up lied to.
Basically the whole thing is that the bank keeps track of who owns which account and how much money they have, so if they go bust, you just have the FDIC come in and use that data and write checks, basically.
Except since they're disrupting banking, they also decided to just fucking not bother, and so even if there was going to be a payout, nobody has any fucking clue who has how much and in which bank said money was.
Absolute clusterfuck, and about what you'd expect from silly-con valley types.
“Hand us your money and us MBAs promise it’ll eventually get somewhere safe” is not reassuring even before the lie.
I can't wait until TRUMP Dismantles the Protections that PREVENT this type of thing from Normally Happening!
Yotta Savings, the fintech that all these people deposited their money with, first came to my attention through this YouTube video from CoffeeZilla a couple months back, seems Yotta was a huge sponsor of really an astounding amount of YouTube creators, who while hawking Yotta to their subscribers also deposited their own money with Yotta as well. Huge mess.
I am from the US and I have no idea what they are talking about here.
Goddam I'm happy to live in a place where these things are well regulated!
This is an absolute horror story, people chose a saving account they thought was super secured, and instead it's a total scam.