### 핀테크 붕괴를 막아야 합니다: 규제 공백으로 인해 사라지는 소비자 저축 혜택

### 핀테크의 붕괴: 요타와 시냅스가 소비자에게 미치는 영향
* 🦃 미국의 추수감사절 주말은 **수천 명의 미국인이 핀테크 회사인 시냅스의 파산**으로 인해 많은 사람들이 저축한 돈을 찾지 못하게 된 안타까운 사연과 맞물려 있습니다.
* 💔 인플루언서가 홍보하는 은행인 요타에 예치한 한 교사의 **28만 달러가 고작 500달러로 줄어든 수익률**은 핀테크 실패의 파괴적인 영향을 잘 보여줍니다.
* 💸 보고서에 따르면 **최대 9,600만 달러의 고객 자금이 사라졌으며**, 14,000명의 요타 고객이 **총 6,500만 달러의 예치금에서 1,180만 달러만 지급받은 것**으로 나타났습니다.
* 🎲 처음에는 '상금 연계 저축 계좌'로 마케팅하던 요타는 **'온라인 카지노'와 유사한 게임화 모델**로 전환하면서 운영의 정당성에 대한 의문이 제기되었습니다.
* 🔍 FDIC는 요타와 같은 핀테크 업체는 은행으로 분류되지 않기 때문에 **보험이 적용되지 않는다**는 점을 분명히 밝혔으며, 이로 인해 소비자들은 **혼란과 금전적 손실**을 입게 되었습니다.
* 🏦 재무부 보고서는 핀테크 분야의 규제 공백에 대해 경고하면서 **이러한 기업들이 기존 은행의 감독을 피하는 경우**가 많아 소비자 자금이 제대로 관리되지 않는 상황을 초래할 수 있다고 강조했습니다.
* 📉 시냅스의 혼란스러운 파산으로 인해 파트너 은행이 **고객 자금을 추적할 수 없게** 되면서 핀테크 업계에서 소비자 보호의 미래에 대한 우려가 커지고 있습니다.
* 🤖 한편, 시냅스의 CEO는 로봇 공학 분야의 새로운 벤처로 방향을 전환했으며, 많은 고객이 **문명 붕괴에 대한 우려 속에서 잃어버린 자산을 되찾을 수 있을지** 궁금해하고 있습니다.

요타의 붕괴는 규제받지 않는 핀테크가 고객의 예금 안전성을 오도할 수 있는 위험을 강조합니다.

It’s Thanksgiving weekend in the United States, which kicks off a holiday season in which Americans eat turkey and watch films about bank runs. These are American traditions. In keeping with this tradition, CNBC reported last week that thousands of Americans have seen

their savings vanish with the collapse of a fintech company called Synapse. The article gives the example of a schoolteacher who deposited the proceeds of her home sale – so basically her life savings – into an influencer-promoted bank called Yotta. She first found

herself locked out of that account – this went on for over six months – and last week she learned that she would only be getting $500 dollars of her $280 thousand dollars back from Yotta – that is point one eight percent of her savings that they are returning to her.

She is of course not the only victim – according to a court-appointed trustee up to $96 million dollars of customer funds have vanished entirely. At Yotta which was a fintech – not a bank – despite being promoted as a bank by a number

of big YouTubers – almost 14 thousand customers report that they are being offered a combined $11.8 million dollars despite having deposited almost 65 million dollars. It is not clear how this money is being divided up, as some customers like the schoolteacher I mentioned

earlier are doing much worse than others. Yotta is a particularly strange example of a fintech – where it was originally launched as offering “prize-linked savings accounts” which are savings accounts in which the depositor receives a low interest rate but then has the

chance of winning a large amount of money in a
sweepstakes. The New York Times described Yotta
a year ago as "a smart way to turn gambling into
a virtue". Andreessen Horowitz – a large Silicon

Valley VC firm – explained in their blog that
fintechs like Yotta differentiate themselves
by appealing to the aspirations and product
demands of Gen Z – which I guess is gambling
and saving in a non-FDIC insured bank account.
– this is why Gen Z are so hard to understand…

Yotta originally offered depositors an interest
rate of 0.2% with the chance of winning up to
$10 million dollars, a prize they later revised
down to $1 million dollars. It doesn’t appear
that the top prize was ever won, and Coffeezilla
reported on his YouTube channel a few months ago

that Yotta pivoted from this sort of gamified
savings model into a what was basically an
online casino (which they describe (for legal
reasons) as an online sweepstakes model.)
Yotta itself has not declared bankruptcy,
but due to the bankruptcy of Synapse,

a fintech company it relied on, its
customers lost access to their funds.
According to CNBC Yotta and other fintechs
in this online savings space advertised that
their deposits were FDIC-insured. CNBC says that
a contract that customers received from Synapse

after signing up for checking accounts stated
that user money was insured by the FDIC for up
to two hundred and fifty thousand dollars.
The FDIC – in contrast – has been very clear
that its insurance fund does not cover
the failure of fintechs or other nonbanks,

and they have said that should such a firm fail, there is nothing they can do. The Treasury department – actually saw this problem coming and issued a report two years ago to the White House Competition Council about the entry of non-banks into the consumer banking space. The report argued that, while neobanks succeeded in increasing competition for deposits, with potential consumer benefits, there was one problem: “These firms are generally not subject to the same oversight for safety and soundness or for consumer protection.”

The report said that “the fintechs avoided becoming banks – which is expensive and brings on regulatory burdens, instead choosing to partner with banks - so they both compete with and work with banks creating regulatory gaps.

Those very regulatory gaps are the reason that all of this money can’t seem to be traced and one of the VC’s who funded Synapse – the fintech that collapsed – has been in the press this week saying that certain financial regulators need to be shut down – as they are slowing down his innovative business practices.

Before we go any further let me tell you about this week’s video sponsor – My Heritage dot com. My heritage dot com is a genealogy and family research website with a massive international records database. I loved digging through the documents and census records from over 100 years ago and seeing my ancestors handwriting on records that list who lived in the family home at the time. The best part about My Heritage – is not just building out a family tree – it’s that it brings your family together,

as you start calling up your aunts, uncles
and grandparents asking them questions,  filling in details of where your ancestors
lived and worked and so on. I learned that my granduncle Charlie flew a Bristol Fighter in
the first world war. The MyHeritage site is well

laid out and easy to use – you can add old family
photographs to the records – even animating them if
you want to – and if you are lucky, you will find
photos that other relatives have uploaded.   
MyHeritage is trusted by 90 million users
worldwide and allows you to search through

more than 20 billion historical documents
to find records of all your ancestors. With
the instant discoveries feature you can
just click on the button and instantly
generate entire lines of your family tree.
I'm only getting going using MyHeritage and

am looking forward to finding out more with time.
MyHeritage are offering a 14-day free trial when
you use my link in the video description or scan
the QR code that's on your screen right now.
In a recent episode of the Joe Rogan experience,
Marc Andreessen, the co-founder of the VC firm

Andreessen Horowitz, took shots at The Consumer
Financial Protection Bureau – I'll let the
(always well-spoken Marc Andreessen explain
the issue himself. [Clip – mostly mumbling]
Now, we might need to fact check some of what Marc
just said. While the CFPB was originally proposed

by Elizabeth Warren in 2007, she was removed
from consideration as its director by the Obama
Administration, and has never headed it up. It's
current director is Rohit Chopra – and I don't
know if Marc struggles with face blindness or
something like that – but it's not easy to mix him

up with Elizabeth Warren. Rohit is a 42-year-old
man of Indian descent and Elizabeth is a 75-year-old woman of, uh… well, it doesn’t matter – it’s
hard to mix them up is what I’m trying to say.
 

Now – the audio seems to be a bit off
in this section [Mumbling] but I think what Marc is saying (I may be wrong) is
that the CFPB supervises banks, thrifts, and credit unions with assets of over $10 billion
dollars, also supervising nondepository mortgage

originators and servicers, payday lenders,
consumer debt collectors, international
money transfer and private student lenders. 
It’s in place to protect consumers from being
ripped off by financial services
providers – but it doesn’t yet
cover fintechs like Yotta and Synapse…
Marc accuses the CFPB of being involved

in debanking – and in particular debanking
conservatives. This is entirely untrue – in
fact they do the opposite – they investigate
banks for discriminatory treatment of customers.
He goes on to effectively change the subject
entirely to discussing Politically Exposed

Persons – and while that is outside the
scope of this video – I do happen to know a
bit about that as I ran a fund for years. I’m
amazed that Marc runs a multibillion-dollar
fund and doesn’t understand these rules. 
Politically Exposed Persons are people like

politicians, their families and their close
business associates. If a politically exposed
person – let’s say someone like Hunter Biden - 
wants to move a large sum of money into a bank
or an investment fund, the financial institution
accepting those funds is required to investigate

the source of those funds, which usually involves
 asking the customer where the money came from – if
 they say it came from selling their house
 or liquidating another investment – you then
 have to ask them for documents proving this.
 This can be a bit awkward and embarrassing – as

your customer often feels accused of wrongdoing
 – but most people in this position are used to
 these procedures, which are in place to prevent
 politicians from taking bribes – or having
 bribes passed to their family members or business
 associates for them. If Elizabeth Warren wanted to

invest a million dollars in an index fund – she
 would likely receive this sort of scrutiny. She
 would have to explain the source of the funds.
 Now in today's day and age – if a politically
 exposed person wanted to put money in your
 fund and said that the money came from crypto

gains – there is a good chance you would be unable
 to take that money – as crypto is widely used in
 money laundering. A lot of crypto people get upset
 when you say this – but financial institutions can
 get in a lot of trouble if they touch dirty money
 – so crypto gains, or gambling wins will lead to

more scrutiny until a financial institution can
 be sure that the money was earned honestly.
 When Chase closed Kanye West’s bank account
 a few years ago (who I believe prefers to be
 called Ye), this is no different to a restaurant
 – or any other private business refusing to serve

a customer – it is constitutionally protected.
 Now, I’m going to take Marc at his word – that he
 wants to have the CFPB shut down because of this
 debanking issue – that he possibly misunderstands.

But Marc unfortunately missed this press release on the CFPB website – that came out about a week before his Joe Rogan interview about how they are going to crack down on illegal debanking (which I’m sure he would have been delighted about) – oh and there is another bit in there about how they

plan to supervise the largest fintech companies. Now, maybe Marc’s firm doesn’t invest in fintech firms and he didn’t hear about this new development – a week before he was on Joe Rogan’s podcast… Let’s check his website… Oh, look at that, Synapse – that’s a fintech isn’t it… and

there’s loads of fintechs and crypto stuff on the list – you know – the kind of stuff that American consumers might need to be protected from. They should probably remove Synapse from their list of investments though, it went bankrupt. 
How would Marc not know about these

investments. It’s all over his website - does he not listen in the meetings? Here is a blog post on his company website from 2021 about Fintech cozying up to the creator economy. Oh look a video link. Come on Marc – the YouTubers know how to cover their tracks, and you

are leaving everything up on your website.
Ok, so let’s back up a bit – what exactly is a fintech anyhow? Well, the word is just a combination of the words “financial” and “technology” and it’s used to describe the use of technology to deliver financial

services and products to consumers and it can apply to areas of banking, insurance, investing – or anything that relates to finance. Examples range from peer-to-peer payment services like Venmo and Zelle to robo advisors to stock- or crypto-trading apps like Robinhood

to app-based insurance companies like Lemonade.
Most of them advertise online – pick a narrow area of finance like taking deposits, or making
short-term loans and try and do it cheaper than a bank would often by automating customer service
and by not needing any physical branch locations.

Synapse was a fintech company that connected
other fintech companies like Yotta to banks. When you deposited money at Yotta, it was passed to
Synapse who deposited it in a bank which held the money and was FDIC-insured. What Synapse did was
keep track of whose money was where. Yotta just

needed to design a gamified front end that people
liked using and organize the sweepstakes, Synapse kept the records, and a bank held the money.
Some of the fintechs – like Yotta promised “enhanced FDIC insurance of up to $500,000
dollars on their websites – explaining that

the funds would be deposited “across
a network of FDIC-insured banks.
Synapse described themselves as a “banking
as a service provider” where they provided the back-end software for around 100 different
fintech companies – who had millions of customers

and they deposited the money at four different
partner banks. The fintechs and the banks all relied on Synapse to track transactions and
account balances and determine how much money was in each customer account at all times.
Rather than licensing their software, Synapse

struck deals with both the banks and the fintech
apps. They handled customer onboarding, KYC and anti-money laundering checks, record keeping,
risk-management and other compliance functions.
Synapse created “for benefit of” accounts at
the four partner banks they dealt with – where

fintech customers’ money was deposited
into interest-bearing pooled accounts.
Synapse, being a tech firm and not a bank,
was mostly free of regulatory oversight.
In April, Synapse filed for (what can only be
described as a chaotic bankruptcy) where the

banks quickly lost access to all customer and
transaction data that was being maintained by Synapse and found themselves unable to work
out whose money was whose. The accounts were all frozen until that could be worked out.
The problem seems to be that there is no

good record – or at least no good – easily
accessible record of whose money is whose
and the various companies involved are
all accusing each other of wrongdoing. As Marc Andreessen would say [Extensive mumbling]
According to the most recent bankruptcy trustees

report dated November 13th, the four partner banks
had $219 million dollars in deposits from Synapse,
and $187 million dollars of that money has
been disbursed to customers so far...
So why isn’t the FDIC insurance kicking in? Well,
none of these apps are banks, and for this reason

they are not covered by FDIC insurance. The
partner banks are FDIC insured – but the banks
didn’t fail – the fintechs did – and the way they
failed is not by investing the money and losing it – but by losing track of who the money belongs
to – and that seems to be where we are today...


Regulators have mostly been sidelined in
this situation and this is because of the
regulatory gaps that the Treasury warned about in
its report to the White House Competition Council
two years ago. Banks are required to show that
they are keeping good records – as obviously

This is an important part of what banks do – but the banks' records just show that the accounts belong to fintechs – and the Synapse failure seems to mean that all detail beyond that is lost. The fintechs in question all worked with banks who keep deposits

of less than ten billion dollars – and if you remember – that means that they are not overseen by the Consumer Financial Protection Bureau. The FDIC has no role in the situation either as no banks have failed nor are they failing. At a hearing in June, a letter from the

Federal Reserve was read out to the court stating that the Fed does not supervise or regulate fintech companies nor does it mediate or have the authority to mediate disputes among commercial entities.

It is expensive and time-consuming to deal with regulators – and fintech companies are all about moving quickly and keeping costs low. One of the ways of doing this is to structure your business model such that it works around existing regulation – which is what happened here – and customers love this until it all goes wrong…

The Bankruptcy trustee – Jelena McWilliams – who was previously the chair of the FDIC writes in her report that “the estate [of Synapse] does not have the funds to implement an independent reconciliation nor any remaining operations or employees to participate in these efforts.” So,

in plain English – Synapse, who built the technology to know whose money is who’s, has run out of money and no longer has any employees who can figure it out. Well, where have they all gone? Well, Sankaet Pathak, the founder and CEO of Synapse,

announced in August that he had raised $11 million in VC funding for a new robotics startup called Foundation. In his Twitter video he said that he had been working on the startup for three months – so basically since the bankruptcy announcement - and his goal is to Automate GDP

through AI and Robotics to free people from labor jobs, allowing them to pursue their passions. He explains that declining birth rates will lead to severe labor shortages in 20-30 years, risking civilizational collapse, making this mission urgent. So yeah – I get that some people

are worried about having lost their life savings – but Sanket is battling civilizational collapse – through AI robots… a noble cause indeed… His near-term goal – he says - is to have a walking humanoid robot by year end – that will be quite a breakthrough – If he needs

one quickly I’d buy that Honda one that was running around and kicking a football ten years ago. If there is one lesson that Sankaet should have learned from Synapse – it’s that you don’t always have to reinvent the wheel. It is not at all clear how this situation will

resolve, the bankruptcy trustee has told the court that there is as much as a $95 million dollar “shortfall” and the judge has said that he suspects that tens of millions of dollars will never be found. - He goes on to say - “This is a very, very unusual situation.” 

Rob Copeland – who I interviewed on this channel a few months ago – wrote an article in the New York Times saying that it’s not always easy to know if your online bank is actually a bank. He says that startups frequently describe themselves using permutations of the word “bank,” even if they

aren’t one. He points out that on its website, 
Chime describes itself as "banking with no monthly fees." – and the fine print then reads, "Chime 
is a financial technology company, not a bank."

The lender Albert – he says - uses the slogan 
"the simple way to bank," and then adds in the fine print, "Albert is not a bank."

Rob advises that you read the fine print, and if you are still unsure, he recommends 
emailing customer service – as a written

record is always valuable. He says that you should 
ask where your money is being held and what other companies are involved. He says that any company 
that can’t provide a straightforward answer may actually be giving you the answer you need.

Now look, I’d love to stick around and tell you 
more about this situation – but over the last 
few minutes I’ve grown increasingly concerned 
about civilizational collapse – and need 
to get to work (right away) on building an AI powered robot – I suggest you do the same.

If you found this video interesting you should 
watch this one on how Pump and Dump schemes are 
now possibly legal next. Don’t forget to check 
out our sponsor MyHeritage.com using the 
link in the video description so that you can 
research your family history. Have a great 
week and see you in the next video. Bye.

Yotta Bank & The Problem with Fintech!

Patrick Boyle is a hedge fund manager, a university professor and a former investment banker. 

This channel is all about quantitative finance. By subscribing you will see videos explaining what is happening in markets right now, you will learn about financial derivatives, corporate finance and how traders use quantitative tools like statistics. You will see interviews with some of the most interesting people in the financial industry.  In addition, you will see some longer form documentaries on the history of financial markets.

To contact Patrick go to the website http://onfinance.org

DISCLAIMER:
This channel is not affiliated with any financial institution. The videos on this channel are for entertainment purposes only and do not constitute financial advice. Those seeking investment advice should seek out a registered professional. Patrick is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment.

Patrick Boyle

Collapse of Fintech Company Synapse and Impact on Customers

Thousands of Americans lost savings due to the collapse of Synapse, a fintech company.

Example of a schoolteacher losing almost all her life savings deposited in Yotta, an influencer-promoted bank.

Up to $96 million in customer funds vanished from Yotta, a fintech promoted as a bank by YouTubers.

Yotta offered prize-linked savings accounts, described as a way to turn gambling into a virtue.

Yotta's business model pivoted from gamified savings to an online casino model.

Misleading FDIC Insurance Claims and Regulatory Gaps

Fintechs like Yotta falsely advertised FDIC insurance on their deposits.

A Treasury Department report highlighted regulatory gaps in the consumer banking space concerning neobanks.

Fintechs avoided becoming banks to evade regulatory burdens, creating regulatory loopholes.

Regulatory gaps hindered tracing of missing funds, with a VC blaming regulators for hindering innovation.

Marc Andreessen's Criticism of the CFPB and Debanking

Marc Andreessen criticized the CFPB, but his claims were inaccurate and misleading.

The CFPB supervises banks and other financial institutions but not yet fintechs.

Andreessen falsely accused the CFPB of debanking conservatives.

Andreessen's discussion shifted to Politically Exposed Persons (PEPs), demonstrating a lack of understanding of financial regulations.

Explanation of Fintechs and Synapse's Role

Fintechs use technology to deliver financial services, operating in various areas like banking and investing.

Examples of fintechs include peer-to-peer payment services, robo-advisors, and app-based insurance companies.

Many fintechs advertise online, focusing on specific financial areas and aiming for lower costs than traditional banks.

Synapse connected fintechs to banks, managing customer funds and tracking transactions.

Synapse's failure resulted in the freezing of customer accounts due to the loss of transaction data.

Consequences of the Synapse Collapse and Regulatory Oversight

Regulatory gaps allowed the situation to unfold without sufficient oversight.

The Federal Reserve stated they do not supervise or regulate fintech companies.

Fintech companies prioritize speed and low costs, often structuring their models to circumvent regulations.

Synapse's bankruptcy trustee reported a significant shortfall of funds and the loss of operational capacity to reconcile accounts.

Synapse's founder launched a new robotics startup, highlighting the lack of accountability for the situation.