As someone who has been impacted by this - I've had over $21,000 stolen from me by these companies - I want to clarify a few misconceptions/questions I see in the comments:

1. "Why are you surprised you lost money, Yotta is a gambling site"

At the time I signed up with Yotta (2020), it was not the online casino that it appears to be today. I don't gamble. I don't own any crypto. I buy ETFs and keep my money in savings accounts.

Back in 2020, Yotta's tagline was "behavioral psychology to help people save" - they even used it in their Launch HN post[1]. Their site (at the time), mentioned "FDIC" six times ("100% free and FDIC insured") - and included their logo twice[2].

So I did not create an account expecting to get rich quick - I wanted to support a YC startup with an interesting idea (Premium Bonds), and fully expected my money to be protected by FDIC insurance.

2. "Why hasn't the FDIC done anything?"

The FDIC steps in to support failed banks - no member FDIC bank has failed here (as others have pointed out). Yotta is not a bank and never actually held any user funds. Synapse Financial, which is now going through bankruptcy court, is not a bank. Evolve Bank, which many believe is responsible for the shortfall (possibly as high as $96 million), is still operating normally.

It's unclear whether my money is even in an FDIC-insured bank. I signed up for a Yotta account, but Yotta had me transfer money to a routing number connected to Evolve. Although I never interacted with Synapse, they were the middleman behind the scenes, moving user funds between various banks (Evolve, Lineage, AMG, and American are the ones listed in the bankruptcy case so far). And with Synapse going bankrupt, all of the underlying banks are pointing fingers at each other as to who owes users what.

As to what regulator ought to step in, that's also unclear. The CFPB directed me to the Federal Reserve. The Federal Reserve directed me to the Federal Reserve Bank of St. Louis, whose jurisdiction Evolve Bank is in. As far as I can tell, the Federal Reserve Bank of St. Louis is asleep at the wheel. (My Representative and Senators, in case you were wondering, have been entirely unhelpful)

3. "Where is the money?"

Unfortunately, without regulators stepping in, it will likely take years of very expensive lawsuits to figure that out. Synapse was responsible for maintaining records of which user funds were held at which bank, and it's clear that they were an abject failure at doing this. The bankruptcy estate does not have enough money to fund a reconciliation (they estimate it will cost $3 million), meaning users like me are being given a shrug and no information on what actually happened to our money.

As far as I can tell, there are two scenarios here:

Scenario A: Synapse lost and/or stole it. In the aftermath of Synapse's bankruptcy, various efforts have been made to piece together its records. It's entirely possible that they incorrectly spent or transferred (or loaned the CEO[3]) user funds. Its former CEO is loudly calling out Evolve as the culprit on Twitter, and has apparently raised $11M for his next venture[4].

Scenario B: Evolve lost and/or stole it. During the bankruptcy process, Evolve has overpromised and underdelivered, has refused to cooperate with other banks in reconciling Synapse's bad data, and is currently telling users that while they may have had our money at some point, they currently don't (Evolve has claimed that they only have $0.83 of my $21,000), but are unable or unwilling to disclose where that money went.

From my perspective, it seems fairly simple: I transferred my money to a routing number connected with Evolve Bank, and at the very least Evolve should be able to tell me where that money went. The fact that they are even refusing to tell the fintechs (i.e. Yotta) what happened to their users' funds, IMO, seems to indicate that they're attempting to delay and stonewall returning funds to end users. For what it's worth, Yotta is currently suing Evolve, and has publicly pointed out that the founder of Evolve has been accused of cooking the books at a previous company[5].

At this point I'm pretty pessimistic about getting any meaningful amount of my money back. That amount isn't enough to justify getting a lawyer of my own, as legal fees would quickly eat up most (if not all) of it. And while class action suits might theoretically bring one or more institutions to justice, I'd likely get pennies on the dollar in terms of my own savings.

I don't know if there's a lesson to be learned in all this, other than to only ever bank with Bank of America, Chase, and Wells Fargo. At the very least, it's going to be a long time before I trust a fintech with my savings again.

[1] https://news.ycombinator.com/item?id=23780062 [2] https://web.archive.org/web/20200709141034/https://www.withy... [3] https://www.linkedin.com/posts/jasonmikula_new-as-synapse-wa... [4] https://techcrunch.com/2024/08/22/founder-of-failed-fintech-... [5] https://www.plansponsor.com/ncfc-subsidiaries-accused-of-coo...