Over a year ago I wrote, “Maybe Don’t Keep Your Money in Fintech Companies (Neobank)?” and one of the main reason I gave was “fintech partners with FDIC-insured banks but fintech themselves aren’t FDIC insured”. We saw how ugly it got with Beam and now we are seeing it all over again with Yotta. It is worth pointing out that Yotta got bad far before they officially announced problems with withdrawals. I even wrote about how Yotta wasn’t worth it about 10 days before withdrawal issues. The underlying issue is that Synapse Brokerage has filed for bankruptcy. Juno, which I have also openly shit on in abovementioned article as well as others (“[Warning] Juno releases….” and “Another look at Juno…“), is facing the same issue.
This issue has got some mainstream coverage (Frobes, CNBC, Fortune, Prospect) but if you want to follow details and see people panicking then see r/OnJuno and more importantly r/Yotta subreddits. People have thousands of dollar stuck on this platform and most if not all thought their money was FDIC-insured. I bet almost all users of these platform didn’t even know what Synapse was, let along what they did for these platform.
TechCrunch, pointing to bankruptcy of Synapse Brokerage, writes an article saying “100 fintechs could be in trouble“. Synapse claims Evolve owes Yotta $111.7 million and $26.5 million to Juno. There are several other fintech that Synapse claims Evolve owes money to (see full list in this tweet). So, does bankruptcy of Synapse mean only fintech associated with Synapse will be in trouble or is this going to imply Synapse partner bank, Evolve Bank and Trust is in trouble too? Some may even wish that Evolve folds so FDIC is forced to step in and make funds whole again.
Evolve has several fintech parameters (see list here). PrizePool is one of Evolve partner that is often mentioned in this blog (see PrizePool review). I have been too lazy and slow at blogging but PrizePool hasn’t been good since their recent changes so you shouldn’t have funds there anyway. Other fintech parteners of Evolve include Step and Melio.
Closing Thoughts
Better be safe and get money out. Also, if you want to play the fintech game, it is a good idea to keep tabs on what is happening. IMO Juno and Yotta hasn’t been good for quite a while. Having said that I have a few hundred stuck in both, in total…lol?
