Payment Processing Status Page
Please note that Thread Bank was not a SynapseFi bank partner and is not involved in this matter, and, therefore, will be unable to assist anyone who reaches out.
We are continuing to work with members of congress to push for a resolution. If you haven't already, please join the End User group on https://www.fightforourfunds.org.
12/5/2024:
Please find the status conference transcript from 12/3 here
12/3/2024
The Trustee's latest status report is out: https://www.cravath.com/a/web/rC4qJKANH995jE8aLY9uct/9HRJk9/9890-465-12_02_2024-pacer465-main-document-012731-00001-central-district-of-california.pdf
AMG National trust notes that:
"AMG has reconciled its inter-bank transfers with Lineage and American. Its auditors requested that Evolve confirm the net transfers between Evolve and AMG, but Evolve did not respond. We remain willing to work with all involved persons to create a combined report of cash flow summaries to share with the Trustee.
Although Evolve’s reconciliation reported finalized on October 18 basically was done in a black box with little transparency, Evolve did reveal that it included only the period starting September 30, 2023. Without providing any explanation, it appears that Evolve is attempting to attribute any Synapse-related shortfall to the last 8months of Synapse’s existence even though Evolve has been Synapse’s first and primary banking relationship since Synapse’s inception in 2017 and even though Synapse reported Evolve account discrepancies prior to October 2023."
When: 12/3/2024 at 10:00AM PT
Zoom Videoconference Link: https://cacb.zoomgov.com/j/1614151416
ZoomGov Meeting Number: 161 415 1416
Password: 075890
Telephone conference lines: 1 (669) 254 5252 or 1 (646) 828 7666
This group will have action items that we believe can be helpful in the effort to have funds rightfully returned to End Users.
We have heard reports from some users about Evolve ACH disbursements starting to hit accounts as of this morning. It may show up as from "Rust Consulting." We are not sure why this took over 2 weeks from when they first sent notices out on November 4th.
We met with staffers on the Senate Banking Committee today to keep them informed of the latest developments with Evolve. We are also reaching out to and speaking with press outlets.
Unfortunately, we are unable to update your Yotta app to reflect these payments because Evolve continues to be evasive and refuses to provide us (nor the Trustee nor the courts nor the other banks) with this critical data needed to update the app balances, unlike other banks making distributions like AMG, which has provided this data consistently.
Thank you to all who filled out the survey. Across our 13.3k respondents thus far, we can report that $11m is reportedly going to be distributed as the "Evolve Payment" of the total reported $59m of "Synapse Ecosystem Balances." Below is a histogram of responses in terms of how much users received as a percentage of their balances.
For those interested, we discovered a few articles about Scot Lenoir, the founder of Evolve, and a court case from 2003 at his previous company First Mercantile Trust. First Mercantile Trust is not listed in Scot's LinkedIn history.
To learn more, see below. This information and history can be useful as you report this issue to the Federal Reserve and any other regulatory bodies.
https://www.plansponsor.com/ncfc-subsidiaries-accused-of-cooking-the-books/
https://www.memphisflyer.com/smokin
https://www.memphisflyer.com/national-commerce-settles-retirement-plan-lawsuit
We found some Evolve executive departures over the last year using publicly available information:
Chris Staab - Chief Technology Officer (2022 - November 2024)
Thomas Holmes Jr. - Chief Marketing & Communications Officer (May 2017 - October 2024) - citing his "integrity" as a reason for his departure in a LinkedIn post
Mark Donovan - Chief Credit Officer (January 2020 - August 2024)
Cecilia Russell - Chief Compliance Officer (April 2020 - January 2024)
Robert Ducklo - General Counsel & Corporate Secretary (October 2022 - September 2023)
Ean Colley - Bank Operations Manager (March 2019 - October 2023)
The company's Board of Directors page is still down, returning a "Page Not Found Error" at https://www.getevolved.com/about/about-us/board-of-directors/
The company's founder Scot Lenoir used to be listed on the website as recently as September as "Chief Executive Officer, Evolve Bancorp Inc." but now is just listed as "Founder." Scot's title on shareholder letters used to be "Chairman Evolve Bancorp Inc" but now recently is signed as "Founder, Evolve Bank & Trust."
10:30pm ET Update. The Trustee has filed their status report. Here it is.
7:26pm ET Update: A motion was filed in court for Evolve to produce information. "Grabr's counsel again attempted to contact counsel on October 11, 21, 23, and 31, and November 12, 2024 to seek production of the materials that are the subject of this motion. (Id.) Counsel for Evolve declined to provide those materials. (Id.)"
See the full motion here:
6:03pm ET Update: Registrations are now open for the hearing tomorrow, so be sure to register ahead of time by clicking the zoom link below.
From yesterday's survey, we so far have 8,700+ responses with $46.7m+ of deposits. The total Evolve payments across these users is $7.7m, implying a payout ratio of 16.5% of deposits.
Evolve has reported publicly it holds $46m as well as $35m reserve it would use if it deemed necessary. According to the Synapse Trial Balance Report, Evolve owes roughly $158m in total deposits. If Evolve used the $46m and the $35m, it would imply a 51% average payout ratio, 3x higher than the figure we are seeing from our survey.
As a reminder, the hearing is tomorrow. Representatives from Evolve will be there.
We are posting the details here again for reference. Click the Zoom link tonight as you typically have to register in advance for these hearings.
When: 11/13/24 at 10am Pacific Time.
Zoom Videoconference Link: https://cacb.zoomgov.com/j/1617042313
ZoomGov Meeting Number: 161 704 2313
Password: 495681
Telephone conference lines: 1 (669) 254 5252 or 1 (646) 828 7666
We also recommend following this page: www.FightForOurFunds.org where End Users are banding together for coordinated outreach to various entities.
Because of Evolve's refusal to of cooperate, we are asking you to let us know the numbers Evolve sent to you.
Please keep an eye out for an email today from support@withyotta.com asking you to fill out a Google Form with the information Evolve gave to you. This is not a scam and is from Yotta.
Please also find readily available the definition of "gaslighting" in the dictionary: "psychological manipulation of a person usually over an extended period of time that causes the victim to question the validity of their own thoughts, perception of reality, or memories and typically leads to confusion, loss of confidence and self-esteem, uncertainty of one's emotional or mental stability, and a dependency on the perpetrator."
As you read these, a reminder that the next status conference is on November 13th. Please see our update on 11/5/24 for how to attend via Zoom. Registrations typically open the day before.
August 15th, 2024
August 30th, 2024
September 13th, 2024
September 27th, 2024
October 23rd, 2024
The excerpts below are from the 9/27/24 and 9/13/24 hearings (see our 11/6/24 update for an except from the 8/15/24 hearing as well):
BELOW IS FROM THE OCTOBER 23rd HEARING:
"After much reflection, I have made the difficult decision to resign from my role as Chief Marketing & Communications Officer at Evolve Bank & Trust. This past year has presented significant personal and professional challenges, and I have chosen to step away in order to prioritize my integrity and well-being."
Evolve announced the completion of reconciliation on October 18th. They waited until the day before the US Presidential Election to start alerting End Users to the result of that reconciliation.
We are making sure to keep in touch with reporters so that the above news does not get buried given the strangely coincidental timing of Evolve's readiness to make payments with the biggest news event in human history.
Please also see below excerpts from the Synapse Financial Technologies Status Conference on August 15th, in which representatives of Evolve acknowledge the existence of a deficit that predates any addition of Synapse Brokerage Cash Management Accounts. Please also see below Evolve representatives saying that the reconciliation Ankura and Evolve were performing would be a system-wide reconciliation in which balances at every Synapse ecosystem bank would be determined. That did not happen.
We are working on getting more recent transcripts, but representatives from Evolve (specifically Mr. Swaminathan) at the most recent status conference said the goal of reconciliation was never to figure out the balances at each ecosystem bank, despite saying before that this was the goal (see below).
We asked Evolve for a list of user balances per their reconciliation to help us support End Users. They refused to provide it to us.
This is not the end.
We continue to recommend following the steps in our 11/5/24 and 11/4/24 updates below. If there is anything else you believe Yotta can do to help you regain access to your rightful funds, we stand ready to help in any way possible - contact support@withyotta.com.
11/05/2024:
A reminder to all impacted end users that there will be a court hearing next week in which you may ask questions and in which representatives for Evolve will be in attendance. Be sure to register in advance as it can take time to be admitted.
When: 11/13/24 at 10am Pacific Time.
Zoom Videoconference Link: https://cacb.zoomgov.com/j/1617042313
ZoomGov Meeting Number: 161 704 2313
Password: 495681
Telephone conference lines: 1 (669) 254 5252 or 1 (646) 828 7666
11/04/2024:
Evolve has started sending emails out to end users with the balance they're returning based on their reconciliation this morning.
Keep an eye out for an email from evolvebankandtrust@rcnotifications.com. Be careful with phishing scams. We encourage you not to click on any links in emails but instead go directly to https://www.reconciliationbyevolve.com/grpmgmt/achcheck/PageControl/Authentication to input the Claimant ID number and last four of your SSN directly.
After inputting your information to login, you will see an "Evolve Payment" figure as well as a "Synapse Ecosystem Balance" figure. If you believe either of these to be inaccurate, you can file an appeal here: https://reconciliationbyevolve.com/Appeal/PageControl/InformationPage as well as contact the Evolve customer support for reconciliation at 877-873-0008. Please also contact support@withyotta.com as we are here to do everything we can to help you get your entire balance rightfully returned to you.
It's worth remembering that Evolve's primary regulator is the St. Louis Fed. You can also contact the St. Louis Federal Reserve at 1-888-851-1920 to let them know the impact this is having on you and the urgency of the matter. You can follow the steps here to submit a complaint: https://forms.federalreserveconsumerhelp.gov/secure/complaint/complaintType.html.
If you want to contact the FDIC, the phone number for their complaint line is 1-877-275-3342.
To file an e-complaint follow the steps here:
https://ask.fdic.gov/fdicinformationandsupportcenter/s/?language=en_US.
Update (5:52 ET):
There is a court hearing on November 13th at 1pm ET that is open to the public. End Users are welcome at the hearings and can raise questions and concerns to Evolve and other parties. The information for the hearing is below. Be sure to register in advance as it can take time to be admitted.
Zoom Videoconference Link: https://cacb.zoomgov.com/j/1617042313
ZoomGov Meeting Number: 161 704 2313
Password: 495681
Telephone conference lines: 1 (669) 254 5252 or 1 (646) 828 7666
10/23/2024:
An additional hearing in the SynapseFi bankruptcy case was held today where the Trustee discussed their most recent status report.
Evolve Bank created a website to provide more information regarding its reconciliation process.
10/19/2024:
Evolve Bank posted an update today regarding its reconciliation process. We will provide additional updates as we get more information.
10/18/2024:
We have reached out to Evolve Bank regarding the status of its reconciliation process, which they had informed the bankruptcy court was expected to be completed by October 18th. Evolve relayed to us that they will be providing additional information following the completion of the reconciliation. As soon as we hear more information from Evolve we will provide additional updates.
9/27/2024:
An additional hearing in the SynapseFi bankruptcy case was held today where the Trustee discussed their most recent status report.
Evolve Bank stated that they expect its reconciliation to be complete by October 18.
The next hearing will take place on 10/23/2024.
9/13/2024:
An additional hearing in the SynapseFi bankruptcy case was held today where the Trustee discussed their most recent status report.
Evolve Bank stated that they expect its reconciliation to be complete by October 18.
9/12/2024:
There will be an additional hearing in the SynapseFi bankruptcy case tomorrow at 1PM ET, and the Trustee will file an additional status report beforehand.
9/4/2024:
An additional hearing in the SynapseFi bankruptcy case was held on Friday where the Trustee discussed their most recent status report.
Evolve Bank has stated that they expect its reconciliation to take 8 weeks from August 23 when their data collection was completed.
To date the following distributions have been made for FBO funds of end users of all fintech companies:
AMG National Trust: $109,270,681
Lineage Bank: $49,200,617
Evolve Bank & Trust: $0
8/29/2024:
There will be an additional hearing in the SynapseFi bankruptcy case tomorrow at 1PM ET.
8/19/2024:
AMG National Trust initiated the first batch of ACH disbursements for those who, according to the final Synapse Trial Balance Report, have funds with AMG and provided them with payment instructions.
8/15/2024:
An additional hearing in the SynapseFi bankruptcy case was held today where the Trustee discussed their most recent status report.
8/14/2024:
Today, AMG National Trust contacted the small number of customers with balances at AMG per the final Synapse Trial Balance Report. Emails were sent from yottapayments@amgnational.com with instructions to begin the process of distributing funds.
Additionally, there will be another hearing in the SynapseFi bankruptcy case tomorrow at 1PM ET.
8/08/2024:
According to the final Synapse Trial Balance Report, AMG National Trust holds certain end customer funds. We sent an email out today to a small number of customers with funds at AMG according to the Trial Balance Report. AMG intends to contact such customers next week for instruction to begin the process of distributing funds.
8/05/2024:
No updates today.
7/31/2024:
The Trustee filed an additional status report tonight, with a hearing scheduled for tomorrow.
7/26/2024:
No updates today.
7/25/2024:
No updates today.
7/24/2024:
No updates today.
7/23/2024:
No updates today.
7/22/2024:
No updates today.
7/19/2024:
No updates today.
7/18/2024:
Yesterday, an additional hearing was held in the SynapseFi case where the Trustee discussed their newly filed status report. The Trustee reported that reconciliation efforts amongst all partner banks and B. Riley Financial, Inc continues.
7/17/2024:
No updates today.
7/16/2024:
No updates today.
7/15/2024:
No updates today.
7/12/2024:
Evolve Bank & Trust, a bank involved in the SynapseFi case, posted an update to its website today regarding the bankruptcy proceedings and funds reconciliation.
7/11/2024:
CNBC is reporting that Synapse partner banks have made substantial progress in completing a full reconciliation in recent days. We will provide additional updates as we get them.
7/9/2024:
During a US Senate Banking Committee hearing today, the Chairman of the Committee, Senator Sherrod Brown asked Jerome Powell, Chair of the Federal Reserve of the United States, about the ongoing Synapse case and what the Fed is doing to help impacted end users gain access to their funds. During his response Mr. Powell declared that the Fed is "strongly encouraging Evolve to do whatever it can to make money available to those depositors". Mr. Powell also highlighted recent enforcement actions taken by the Fed against Evolve. Senator Brown emphasized that they will continue the monitor the situation and urged the Fed to use its supervisory authority to help end users get access to their funds.
A video of the hearing can be found here.
7/5/2024:
No updates today.
7/3/2024:
The Trustee filed an additional status report yesterday and a supplemental report this morning. A hearing regarding the status reports was held today. The Trustee reported that reconciliation efforts amongst all partner banks continue and that B. Riley Financial, Inc. has been retained to help with forensic accounting and the management of the SynapseFi estate. Significant progress should be made regarding the reconciliation and release of customer funds through the help of the forensic accountant.
7/2/2024:
No updates today.
7/1/2024:
Today, U.S. Senator Sherrod Brown, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, along with Senators Ron Wyden, Tammy Baldwin, and John Fetterman sent letters to all parties involved in the SynapseFi case urging for a restoration of consumers’ access to all of their money. More information can be found here.
6/28/2024:
We recently learned of a cybersecurity breach impacting one of Synapse's partner banks, Evolve Bank & Trust. This breach resulted in unauthorized access to and leakage of records, such as account numbers and other personal information related to their fintech programs.
We contacted Evolve Bank & Trust to obtain more information about the breach, its potential impact on Yotta platform's end users, and the remediation steps they are taking.
Evolve Bank & Trust has acknowledged these claims of a cyber incident and is investigating the situation. Evolve Bank & Trust further mentioned that they will provide us with detailed communication to share with end users. We will update you as soon as we have more information from them.
Please note that your Yotta account password was not exposed as we do not share this information. For more details, please visit the Evolve Bank & Trust cybersecurity incident page.
6/27/2024:
No updates today.
6/26/2024:
No updates today.
6/25/2024:
No updates today.
6/24/2024:
No updates today.
6/21/2024:
We continue to be in contact with FINRA, the Trustee, the banks and multiple members of Congress. An additional status report hearing was held today where the Trustee discussed their most recent status report. All parties continue to work to help all consumers get access to their funds.
6/17/2024:
We met with staff members of FINRA today and continue to be in contact with all relevant stakeholders.
6/14/2024:
The Trustee filed an additional status report yesterday and a hearing regarding the status report was held today. The Trustee reported that reconciliation efforts amongst all parter banks continue and the Trustee hopes significant progress will be made in the next two weeks. Neither the Trustee nor the Judge in the case believe they have jurisdiction to compel any of the partner banks to distribute funds in a particular manner and are working with government agencies to try and do so.
In addition, we are meeting with staff members of FINRA on Monday (6/17) to try and expedite a resolution for customer access to funds.
6/13/2024:
The Trustee is expected to file an additional status report with the court today to give an update on their progress over the last week. In addition, there is another court hearing tomorrow at 1:30 PM PT where the Trustee's report and the overall case will be discussed.
We also continue to be in touch with multiple members of Congress to try and expedite a resolution for customer access to funds.
6/8/2024:
During the hearing, the Trustee updated the court on the status of their work. The Trustee is making meaningful progress towards their number one priority of restoring customers' access to their funds.
We will provide additional updates as the Trustee continues their work. Additionally, we are meeting with the staff of a United States Senator on Monday to try and help add resources to expedite a resolution for customer access to funds.
6/6/2024:
The Trustee filed an initial status report in the SynapseFi bankruptcy case today outlining the steps they have taken since being appointed the Trustee on this case. The report stated "Since the appointment, the Trustee and proposed counsel have been working around the clock to investigate the events that led to the reconciliation issues and freezing of end user accounts and identify a path to unfreezing customer accounts as soon as possible."
The Trustee proposed multiple potential paths forward in the report. There is a court hearing tomorrow at 1:30 PM PT where the Trustee's report and proposed initial recommendations will be discussed. We will provide another update as soon as the hearing concludes.
6/5/2024:
On Friday (6/7) we will be meeting with a member of the United States House Committee on Financial Services to try and help expedite a resolution.
Additionally, the first status report will be filed by the Trustee no later than 6:00PM PT tomorrow (6/6).
6/4/2024:
We are working to schedule meetings with relevant members of Congress later this week to try and help expedite a resolution.
6/3/2024:
On Friday (5/31), documents were filed in the SynapseFi bankruptcy case that allows information amongst all parties to be shared more easily to help come to a resolution.
5/30/2024:
Pending in app withdrawals have been canceled to help bank partners better facilitate access to funds.
We previously reported that the Chapter 11 Trustee would be giving an update today, however, we were notified that the first update will occur on June 6th and then weekly thereafter. We are aware that the Trustee is working hard to help resolve this matter.
5/29/2024:
Correction: The Chapter 11 Trustee is expected to release a status update no later than Thursday, June 6 by 6:00 PT on their progress, not on May 30th as we were first told by the US Trustee on the case.
5/24/2024:
A Chapter 11 Trustee, Jelena McWilliams, was appointed in the SynapseFi case today who will work to help restore payment processing.
5/23/2024:
There is an important court hearing tomorrow at 11:00AM ET regarding SynapseFi where resolutions about payment processing are expected to be discussed.
5/22/2024:
Major news networks, including CNBC, are starting to cover this issue, which should help push SynapseFi and its partner banks to come to a resolution.
5/21/2024:
We are continuing to speak with all parties and regulators to help reach a solution.
5/20/2024:
SynapseFi, Evolve Bank & Trust and Lineage Bank are meeting with a mediator today in order to try and come to a mutual resolution regarding their disagreements so that payment processing can be restored.
5/19/2024:
We are experiencing payment processing failures on ACHs, Wires and debit and credit cards due to an outage with Synapse Brokerage's banking processors.
We are actively working on a resolution and will let you know once it's resolved. We apologize and understand that this is not acceptable and is a massive disruption to your daily lives.
What happened?
On May 7th, we were notified that Lineage Bank, member FDIC, halted ACH processing for all Synapse Brokerage accounts, and that Evolve Bank & Trust, member FDIC, would begin to process ACH transactions on behalf of Synapse Brokerage. Yotta customers hold accounts with Synapse Brokerage.
On the evening of May 11th, we were notified by Evolve that they never agreed to take on ACH processing and would be halting all payment processing that they are involved with, effective immediately.
These events have left Synapse Brokerage without an ACH processor, and Evolve’s decision to freeze cards is causing all card transactions to fail.
How does this impact me?
Customer funds in the Synapse Brokerage Program are swept (deposited) into accounts at a network of member FDIC banks. Funds held in these accounts are eligible for FDIC insurance.
All programs that work with Synapse are impacted by this. ACH transfers and card transactions will not go through until banks restore their services.
What we are doing about it
We understand the importance of this matter and are working around the clock to get ACH and card processing restored, which will enable customers to transact.
Ultimately, it is up to Evolve to restore card services, and Lineage or Evolve or another processing bank to provide ACH services.
We are in contact with regulators to expedite a resolution, since this is unacceptable.
