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The complete answer is not known. When Synapse Financial Technologies, a nonbank intermediary linking fintech apps with partner banks, failed in 2024, the banks’ records showed less money for end users than Synapse’s ledgers said customers were owed. The Consumer Financial Protection Bureau (CFPB) reported an estimated $60–90 million shortfall in 2025. That is a discrepancy between records and bank holdings—not proof that the entire amount was stolen or a definitive account of where every dollar went. The available information does not establish that a complete system-wide reconciliation had been finished by October 7, 2026.
How could a fintech balance differ from the money a bank held?
Synapse was not a bank and did not itself provide FDIC-insured deposits. Its software connected fintech platforms with partner banks. A customer might see a balance in a fintech app, while the underlying funds were held in an account at a partner bank and detailed records assigning portions of that account to individual end users were kept by the fintech, Synapse, or both.
The Federal Deposit Insurance Corporation (FDIC) describes this kind of arrangement as a custodial-account structure: a bank holds funds while a fintech or other intermediary maintains detailed end-user records. A customer’s app balance is therefore not, by itself, the same thing as a bank record showing that exact amount in that customer’s name. If records are incomplete, inaccessible, or inconsistent, the bank may have difficulty promptly verifying individual claims. FDIC rulemaking on custodial-account recordkeeping
| Record or asset | What it could establish | What it could not establish on its own |
|---|---|---|
| Fintech or Synapse ledger | The balance attributed to an end user in the platform’s records. | That the partner bank held the same amount or that a particular transfer had settled. |
| Partner-bank records | The funds the bank recorded as held in relevant accounts. | How to allocate the funds among end users if detailed, reliable customer records were unavailable or did not match. |
| Customer-facing app balance | The amount the platform displayed or attributed to a customer. | A guarantee that the funds were immediately accessible or that the displayed balance matched the bank’s records. |
What happened when Synapse failed?
- April 22, 2024: Synapse filed for Chapter 11 bankruptcy. The CFPB describes it as a Delaware corporation headquartered in Woodland Hills, California, that provided software connecting nonbank fintech platforms and partner banks. CFPB case page
- May 11, 2024: According to the CFPB’s 2025 complaint, Synapse did not maintain Evolve Bank & Trust’s access to its online dashboard and stopped sending daily general-ledger reports. Evolve and Lineage Bank halted processing and froze activity. Customers could not use debit cards, withdraw or transfer money, pay bills, or receive deposits. CFPB complaint
- May 24, 2024: A bankruptcy court appointed a Chapter 11 trustee. The FDIC’s rulemaking describes difficulty accessing Synapse data, including because former employees with relevant system credentials had been terminated, followed by challenges reconciling the company’s records with bank records. FDIC rulemaking
- August 30, 2024, as recounted in an October 30 submission: The trustee reported that more than $60 million of $219 million in funds held in “for benefit of” (FBO) accounts at partner banks as of May 24 had not yet been distributed, and gave an estimated shortfall of $65–95 million. The undistributed amount was a point-in-time distribution status, not a final measure of losses. October 2024 submission
- Through March 2025: The CFPB complaint says partner banks continued making distributions, often in cases involving very low balances, invalid addresses, or returned payments. The Bureau said many end users had not received their full May 17, 2024 platform balance and that some distributions took more than eight months. CFPB complaint
- August–September 2025: The CFPB filed an adversary proceeding and proposed a stipulated final judgment on August 21; the court entered the judgment on September 12. The judgment included injunctive relief, including a ban on selling customer information, and a $1 civil money penalty. The penalty made the Bureau eligible to seek consumer redress from the civil penalty fund; it was not itself a reimbursement to customers. CFPB case page
What is known about the shortfall—and what is not?
The CFPB’s 2025 case page reports a trustee-estimated shortfall of $60–90 million: the difference between partner-bank holdings and end-user funds reflected in Synapse’s records. An October 2024 submission by Better Markets, recounting the trustee’s August 30 report, gave an earlier estimate of $65–95 million and said the reason was then unknown. These are estimates from different dates and publishers, not a single settled figure. CFPB case page · October 2024 submission
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The October 2024 submission also described a one-day example involving one Synapse Brokerage platform at Evolve: a Synapse ledger showed an approximately $85 million increase in end-user funds, while Evolve received $2,686,233 in incoming end-user funds during that period. The figures illustrate why records could not simply be treated as interchangeable; they do not, by themselves, prove the ultimate movement or ownership of the money.
The sources establish a mismatch and a difficult reconciliation. They do not establish a final destination for the entire estimated shortfall or prove that the whole amount was stolen. “Missing” in this context means the records and funds did not reconcile; it should not be read as a finding of theft, fraud, or liability by a named party.
Were all customers paid back?
No source available here establishes that all customers received their full balances. The CFPB’s August 2025 complaint said many end users had not received the full balance attributed to them on May 17, 2024, and that some distributions took more than eight months. A January 8, 2026 update appears in the search-result text for Evolve’s reconciliation portal: Evolve said AMG, Lineage, and American had not provided data needed for a full reconciliation and that it planned distributions to certain end users. Because the portal page itself was not independently accessible, treat that as an attributed update, not confirmation of the final status. The sources available do not verify a completed system-wide reconciliation or a final total recovered by customers. Evolve reconciliation portal
Does FDIC insurance cover a fintech failure?
FDIC insurance protects deposits when an insured bank fails; it is not general insurance against the failure of a nonbank fintech or intermediary. In a custodial arrangement, pass-through deposit insurance may apply only when the account structure and records satisfy applicable requirements. A fintech’s “FDIC insured” description does not make the fintech a bank or guarantee that every product, balance, or failure scenario is covered. The FDIC’s rulemaking discusses the recordkeeping banks need to determine deposit ownership and coverage. FDIC rulemaking
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesWas Evolve’s separate Federal Reserve action a finding about the shortfall?
No. On June 14, 2024, the Federal Reserve announced an enforcement action against Evolve over deficiencies in risk management, anti-money-laundering, and consumer-compliance programs, requiring stronger oversight and recordkeeping for fintech relationships. The Board expressly said its action was independent of Synapse’s bankruptcy. It should not be presented as a finding that Evolve caused the estimated shortfall. Federal Reserve press release
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