A bipartisan group of U.S. senators, including Sherrod Brown, Ron Wyden, Tammy Baldwin, and John Fetterman, has publicly called on Synapse’s owners, partners, and venture capital backers to swiftly restore access to customer funds. This urgent demand follows Synapse’s bankruptcy filing in May, which has left customers unable to access their accounts since mid-May.
Synapse, a provider of banking-as-a-service solutions for fintech firms, faced financial instability culminating in a Chapter 7 bankruptcy liquidation. The senators, in their joint letter, pointed fingers at Synapse’s major investors, such as Andreessen Horowitz, and banking partners like Evolve Bank & Trust, highlighting their shared responsibility for the frozen customer funds.
The letter underscored concerns over a potential shortfall of $65 to $96 million in customer deposits, stressing the immediate need to resolve the crisis and restore consumer trust. Additionally, it criticized the vulnerabilities exposed by the banking-as-a-service model, impacting both hardworking Americans and small businesses reliant on Synapse’s financial infrastructure.
Recent incidents, including a cyberattack on Evolve Bank affecting partner companies, have further highlighted regulatory and security challenges within the fintech sector.
Philips Babatunde