The Synapse debacle continues.
Former FDIC Chair Jelena McWilliams is the court-appointed trustee managing the bankruptcy process. She was appointed on May 24.
On Friday, the bankruptcy judge held a hearing during which the first report from McWilliams was discussed. She has been trying to reconcile the missing funds, and it appears that there is an $85 million shortfall.
This is the first attempt to get an independent determination of the scale of missing funds.
McWilliams said that Synapse apparently commingled funds among several institutions, using multiple banks to serve the same companies.
What is worse is that there is no one left at Synapse to help, as all employees were fired on May 24. What a mess.
Meanwhile, ?fintech customers are still locked out from their funds. McWilliams recommended ?that all FBO account holders ?receive a partial payment but there was no agreement on the ?exact path forward.
If you want to stay informed about Synapse, you need to follow Jason Mikula’s writings (here is his latest). We are still likely weeks or even months away from a complete resolution.
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> Synapse bankruptcy trustee says $85 million of customer savings is missing in fintech meltdown
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The missing funds explain what is at the heart of the worst meltdown in the U.S. fintech sector since its emergence after the 2008 financial crisis.
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