How Millions of Americans Got Tricked Into Using a Bank That Isn't a Bank

Yotta’s Missing Customer Funds

The report investigates why thousands of customers of Yotta, a savings app that advertised FDIC-insured accounts, lost access to their money in 2024—and why nearly $100 million in customer funds remains unaccounted for.

What happened

Many customers opened Yotta accounts to earn higher interest or save for emergencies, relying on the company’s assurances that their money was FDIC insured. When withdrawals and debit-card purchases stopped working in May 2024, customers were initially told the disruption was temporary. Some still cannot access their savings.

Yotta was a fintech company, not a chartered bank. Its banking arrangements involved Synapse, a financial-technology intermediary, and partner banks, including Evolve. Synapse pooled many customers’ deposits into “for benefit of” accounts and kept the records showing how much belonged to each person.

Synapse filed for bankruptcy in April 2024, and its software went offline, exposing a major accounting gap. The report cites a 2022 email in which an Evolve employee said Synapse’s figures and the bank’s records differed by “a couple hundred million” on a daily basis. Synapse had also moved some funds among partner banks, further complicating efforts to determine where the money was.

Why customers struggled to recover their money

FDIC insurance is designed to address the failure of an insured bank. Evolve did not fail, and neither Synapse nor Yotta was a bank, leaving customers caught between companies disputing responsibility. Evolve said it would return the customer funds it could identify. However, interviewees described receiving offers far below their account balances—including amounts of just a few dollars.

Customers said they had to rely on credit cards, delay home purchases and repairs, or withdraw retirement savings to cover expenses. Many described not only financial hardship but also a loss of trust.

Broader concerns and proposed solution

The report says many fintech services use bank partnerships and pooled accounts. As a result, customers may not know which bank holds their funds or what records are used to track them. It argues that consumers cannot realistically audit these arrangements or verify whether their deposits would be protected if a company failed.

Financial-regulation expert Hilary Allen says fintech companies face a fragmented system of state oversight, while federal banking regulators do not directly regulate them as banks. The report argues that fintech firms can benefit from bank partnerships while avoiding some obligations associated with a bank charter. It also criticizes what it sees as inadequate enforcement and political influence by technology investors.

The report argues that lawmakers should enforce existing banking rules and end fintech-bank partnerships of this kind. It contends that companies offering banking services should obtain bank charters and accept the accompanying obligations. It closes by noting that Yotta remained available as an app, Synapse’s former CEO had moved on to a new venture, and Evolve announced another fintech partnership.

Presenters and contributors

• Sanya Dosani: Host, per the video credits
• Jason Mikula: Fintech analyst and newsletter publisher
• Hilary Allen: Financial-regulation expert
• Chad and other unnamed Yotta customers