Fintech nightmare: 'I have nearly $38,000 tied up' after Synapse bankruptcy
A dispute between a fintech startup and its banking partners has ensnared potentially millions of Americans, leaving them without access to their money for more than a week, according to recent court documents.
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.
The situation deteriorated in April after Synapse declared bankruptcy following the exodus of several key partners. On May 11, Synapse cut off access to a technology system that enabled lenders, including Evolve Bank & Trust, to process transactions and account information, according to court filings.
That has left users of several fintech services stranded with no access to their funds, according to testimonials filed this week in a California bankruptcy court.
One customer, Chris Buckler, said in a May 21 filing that his funds at crypto app Juno were locked because of the Synapse bankruptcy.
«I am increasingly desperate and don't know where to turn,» Bucker wrote. «I have nearly $38,000 tied up as a result of the halting of transaction processing. This money took years to save up.»
Until recently, Synapse, which calls itself the biggest «banking as a service» provider, helped a wide swath of the U.S. fintech universe provide services like checking accounts and debit cards. Former partners included Mercury, Dave and Juno, well-known fintech firms that catered to segments including startups, gig workers and crypto users.
Synapse had contracts with 20 banks and 100 fintechs, resulting in about 10 million end users, according to an April filing from founder and CEO
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