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Fintech nightmare: ‘I have nearly $38,000 tied up’ after Synapse bankruptcy
Synapse is as a middle-man between customer-facing fintech brands and FDIC-backed banks, but it's had disagreements about how much in customer balances it owed.
Since last year, Synapse — an Andreessen Horowitz-backed startup that serves as a middle-man between customer-facing fintech brands and FDIC-backed banks — has had disagreements with several of its partners about how much in customer balances it owed. Customers mistakenly believed that because funds are ultimately held at real banks, they were as safe and available as any other FDIC-insured accounts, said Jason Mikula, a consultant and newsletter writer who has tracked this case closely. Regulators have yet to take a role in the dispute, partly because the underlying banks involved haven't failed, the point at which the FDIC would usually intervene to make customers whole, Mikula added.
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