Former Texas schoolteacher Kayla Morris is among thousands of Americans locked out of savings accounts after the fintech firm Synapse collapsed. Morris, who saved over $280,000 from selling her home, was recently told she could only recover $500. The crisis, triggered by disputes between Synapse and Evolve Bank, revealed that up to $96 million of customer funds is unaccounted for.
Synapse, which linked nonbank startups to small lenders, filed for bankruptcy in May after disputes and client departures. A court-appointed trustee cited a lack of funds to fully reconcile the missing money, leaving everyday customers to bear devastating losses. At one startup, Yotta, 13,725 customers deposited $64.9 million but are being offered just $11.8 million in returns.
The fallout exposes risks in fintech systems where customers rely on middlemen instead of direct banking relationships.
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