It’s kind of terrifying that an app can represent itself as offering FDIC insured accounts which turn out to be moonbeams, vapor and despair https://www.cnbc.com/2024/11/22/synapse-bankruptcy-thousands-of-americans-see-their-savings-vanish.html
@MikeTRose @GeekAndDad “…Andreessen Horowitz-backed Synapse doesn’t have the money to hire an outside firm to perform a full reconciliation of its ledgers…” So basically the villains here managed to keep their hands clean while everyone else is left in the lurch.
@atomicbird Unclear who stole the money, but it sure sounds like someone did!
I don’t get why the police or FBI isn’t involved (since it’s multi-state). Or the Treasury Department. Certainly the FDIC people should be all over this because if people lose faith in FDIC the banking system is going to feel some pain.
@GeekAndDad @atomicbird the machinations are complex and weird but it looks like Synapse was trying to do arbitrage by stashing money in (legal) FBO accounts, which blinded the banks to the underlying ledger and who actually was due the money https://www.bankingdive.com/news/5-lessons-learned-from-synapses-collapse/731543/
@MikeTRose @atomicbird Interesting, thanks.
That’s all very nice that regulators are trying to reduce the chance this will happen again, but the people whose money was stolen need to be made whole. One way to make it less likely is to make this a very bad investment for VCs. Make them pay back the people whose money was stolen. These jokers need to make it right to the people who were harmed. If they don’t, throw them in jail for fraud, theft, false advertising, etc.
@MikeTRose it is, but no one should trust tech bros “trust me bro” promises with their entire life savings either. I hate seeing people suffering from incredibly bad choices; scammers and grifters will always exist, and so will irresponsible fools. It’s horrible across the board.
@ObjectiveT I don’t think (some or most of) these people realized they weren’t dealing with a bank in a direct relationship that would have preserved the FDIC protections. https://www.bankingdive.com/news/5-lessons-learned-from-synapses-collapse/731543/