Yotta Savings Accounts Frozen as Banking Partner Synapse Implodes
Bank runs imminent amid concerns over liabilities passed around like pantie raid pranks.
First we realize there is a difference between a bank failure and this Savings App called Yotta. But the purpose of this article is to indicate how interconnected and financialized things are.
This “lock out” or “frozen funds” event can not occur with stacks of gold or silver rounds. Gold and silver are the only two assets that are not simultaneously someone else’s counterparty risk.
The collapse of Synapse Financial Technologies, a banking-as-a-service provider, has resulted in around 85,000 customers of the fintech app Yotta being locked out of their savings accounts. Here are the key details:
Yotta is a fintech app that gamifies savings by offering prizes and rewards for depositing money into FDIC-insured accounts.
In late 2022, Yotta informed customers that their accounts were being transferred from Evolve Bank & Trust to brokerage accounts managed by Synapse, assuring them the funds would still be FDIC-insured.
However, in May 2024, Evolve froze around $114 million in customer deposits belonging to Yotta and other fintechs serviced by Synapse, citing inability to verify account balances and compliance requirements.
An estimated 10-20 million fintech "depositors" have been impacted, with some Yotta customers reporting having over $60,000 locked in frozen accounts.
Customers have reported hardships like being unable to pay mortgages, buy groceries, or access their paychecks due to the account freezes.
The situation stems from discrepancies between Synapse's records of customer account balances and those of its banking partners like Evolve, an issue known to Synapse's investors and partners for at least 2 years.
Synapse filed for bankruptcy in April 2024 after a planned $9.7 million acquisition by TabaPay fell through, leaving it facing liquidation.
Federal regulators like the Federal Reserve have stated they lack authority to intervene, while a bankruptcy judge has urged them to assist in restoring customer access to funds.
So in summary, around 85,000 Yotta customers have had their savings accounts frozen due to the collapse of Synapse, the fintech's banking middleware provider, leaving them unable to access potentially millions in deposits
You wake up one morning, log into your bank account, and stare at a flashing red alert:
Your account’s transactions have been FROZEN.
Your ability to send money and receive money … SHUT DOWN.
Your crime? You didn’t commit one.
It all starts with this document, outlining a frightening new program that could give unelected Federal officials the power to closely monitor or even freeze your account …
Based on your everyday transactions. Based on your buying behavior.
Even based on your political views or the charities you donate to.
Over 100 of the nation’s largest banks have already joined and will be a part of the rollout starting now.
So, there’s a good chance your bank is already participating.
I’ll share the names of the banks involved in a moment.
But you don’t have much time left. And that’s why I’m talking to you today.
To warn you … and show you what I’m doing to protect my retirement.
And now, over 121 financial institutions have joined the first phase of Fed Control, including:
Capital One Financial
Fidelity Securities
First Bank
Goldman Sachs
JPMorgan Chase
U.S. Bank
Wells Fargo
Bank of America
and many more
Keep in mind, these 121 banks are merely part of the first phase. Soon thereafter, this program will roll out to virtually all US banks, credit unions, and savings and loans.
And I repeat: This Fed Control program is launching now.
You cannot “opt out.”
You cannot simply switch banks.
You don’t get to vote against this.
And you don’t have a lot of time. The program is about to launch. And almost no one outside the Federal Reserve understands what’s really possible.
5 other reasons below…
#1 Banks by Statute are not required to hold any of your money in the bank. This is what is called the recently passed 0% reserve requirement.
Yes, the reserve requirement in the United States has been reduced to zero percent. The Federal Reserve announced on March 15, 2020, that reserve requirement ratios would be set to 0%, effective March 26, 2020, eliminating reserve requirements for all depository institutions[1][2][3]. This action was taken in response to the COVID-19 pandemic to jump-start the economy by allowing banks to use additional liquidity to lend[2]. As a result, depository institutions are no longer required to maintain deposits in a Reserve Bank account to satisfy reserve requirements[4]. This change has been in effect since March 26, 2020, and there are currently no plans to reinstate the reserve requirement[4].
Citations:
[1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm
[2] https://www.investopedia.com/terms/r/requiredreserves.asp
[3] https://www.federalregister.gov/documents/2022/12/01/2022-26065/reserve-requirements-of-depository-institutions
[4] https://www.eidebailly.com/insights/articles/2020/4/federal-reserve-eliminates-reserve-requirements
[5] https://cointelegraph.com/news/why-isn-t-the-federal-reserve-requiring-banks-to-hold-depositors-cash
The reserve requirement for banks, also known as the reserve ratio, is the minimum amount of funds that banks must hold in reserves. Before March 2020, the U.S. central bank, the Federal Reserve, required banks to have a percentage of funds tied up in reserves. The percentage was 3% or 10% of money held in transaction accounts, such as checking accounts, and the percentage depended on a bank’s size. However, in March 2020, the Fed lowered the reserve requirement ratio to 0%, meaning there is no longer a reserve requirement for banks.
This change was made to stimulate the economy, and the 0% reserve ratio has remained in place since late March 2020
Remember, By Law Banks are held to the High Bar of Having a 0% reserve requirement meaning that if you put 1,000.00 in the bank you just made a $1000 unsecured loan to the bank.
#2 - 2023 Bank Failure Watch here in USA
As of today there have been 5 bank failures in 2023 that have been put into FDIC receivership.
These failures include :
1. First Republic Bank, San Francisco, CA
2. Silicon Valley Bank, Santa Clara, CA
3. Heartland Tri-State Bank, Elkhart, KS
4. Citizens Bank, Sac City, IA
5. Signature Bank, New York, NY
6. Republic First Bank, Philadelphia PA
The total assets of these failed banks in 2023 amount to billions of dollars
The FDIC has taken various measures to protect depositors, such as entering into purchase and assumption agreements with other banks to assume the deposits and assets of the failed banks.
But look at the table below where you can plainly see The FDIC has less than 1% of deposits in their fund.
#3 When you make a Deposit in the Bank it is no longer your money but you are making an unsecured loan to the bank
Exploring Banking Realities: Rethinking the Notion of Deposits as Unsecured Loans
In the realm of banking, the commonly held belief portrays these financial institutions as deposit-taking entities, entrusted with safeguarding funds and facilitating loans. However You are not making a Deposit. By Law you are handing the bank an unsecured loan and they have no legal responsibility to keep any of your money in reserves. ZERO
In the extensive 5,000-year history of banking, studies have been conducted to substantiate the prevailing perception that banks function as deposit-taking institutions while also engaging in lending activities. However, a closer examination of the legal framework reveals a striking contrast to this common belief. The legal reality challenges the notion that banks take deposits and lend money, asserting that they do neither.
The term "deposit," traditionally associated with a secure placement of funds within a bank, is debunked by legal intricacies. Contrary to the conventional understanding, a deposit is not a bailment and is not held in custody at law.
Legal authorities, including courts and various judgments, unequivocally declare that when individuals provide money to a bank under the label of a deposit, it essentially constitutes a loan to the bank. This legal perspective renders the term "deposit" devoid of substantive meaning.
Deposit Clarification: The term "deposit" is deemed meaningless in legal terms. Courts and judgments emphasize that money given to a bank is essentially a loan.
Deposit as Record of Debt: What is commonly called a "deposit" is revealed to be the bank's record of debt to the public, challenging traditional understanding.
explained by Professor Richard Werner who is blacklisted by The Parasitic Class
#4 Smoke and Mirrors. Banks are Insolvent. FDIC Receivership is a SCAM. Here’s Why?
Look at the graphic below.
It shows total deposits in typical US commercial banks at $17.34 Trillion.
Yet there is only $128 Billion in the FDIC Fund.
This means US government and banking deposits are insolvent because funds in FDIC cover .74% of our collective deposits. That’s far less than 1%
Given the simple math (ratio), this means if you have $1,000 in the bank, all of it is wiped out, but you may be able to recover $7.41 out of your $1,000
Math formula below
#5 - Japan, Euro and USA Banks on Brink of Collapse
UBS circling the drain
HSBS insolvent
Credit Suisse on the Brink of Collapse
Dominoes falling in Japan, Europe, USA
Today on Reuters
