"I have no money."

[Jolly]

https://www.cnbc.com/2024/11/22/synapse-bankruptcy-thousands-of-americans-see-their-savings-vanish.html

[Horace]

That's a nightmare. I hope everybody is made whole. The story doesn't address why anybody would have put their money there. I wonder if any of the terms of those savings accounts looked too good to be true.

[jon-nyc]

I feel for them, and I hope they find the 'missing' money, but frankly I don't want to set a precedent where the government bails out failed Fintech startups.

Now it's time for me to get defensive persnickety.

“When you tell people about this, it’s like, ‘There’s no way this can happen,’” Jacobs said. “A bank just robbed us. This is the first reverse bank robbery in the history of America.”

No, you lost your money in a risky Fintech startup.

“When I signed up, they gave me an Evolve routing and account number,” Meloan said. “Now they’re saying they only have $5 of my money, and the rest is someplace else. I feel like I’ve been conned.”

I give people my Chase routing and account number, that doesn't make me a bank!

I would like to see how clearly they advertised that they weren't FDIC insured. If it was insufficient maybe a16z can make them whole. But not you and me.

[LuFins Dad]

@jon-nyc said in "I have no money.":

I feel for them, and I hope they find the 'missing' money, but frankly I don't want to set a precedent where the government bails out failed Fintech startups.

Now it's time for me to get defensive persnickety.

“When you tell people about this, it’s like, ‘There’s no way this can happen,’” Jacobs said. “A bank just robbed us. This is the first reverse bank robbery in the history of America.”

No, you lost your money in a risky Fintech startup.

“When I signed up, they gave me an Evolve routing and account number,” Meloan said. “Now they’re saying they only have $5 of my money, and the rest is someplace else. I feel like I’ve been conned.”

I give people my Chase routing and account number, that doesn't make me a bank!

I would like to see how clearly they advertised that they weren't FDIC insured. If it was insufficient maybe a16z can make them whole. But not you and me.

Are they required to advertise that they aren’t FDIC insured?

[jon-nyc]

In general, Fintech companies have similar requirements to brokerage companies.

There may become devilish details that I'm unaware of, though.

[LuFins Dad]

I did not know that. I’ve always made sure my accounts were in FDIC insured banks. Of course, I’ve never carried a lot in banks other than what’s needed to cover 2 months in bills. That is changing next year, though.

[jon-nyc]

Only a couple of times in my life have I had bank balances substantially above the FDIC limit, always when I am about to buy or just sold real estate. Although the odds of a black swan event are tiny, I'm always aware that it exists. Of course I pay more attention to bank regs than the average Joe.

[jon-nyc]

I should put a big caveat on my above posts - I don't know what the exact product was or how it was advertised. But the higher-than-market interest rates to me point to an investment being made, rather than a typical deposit account.