New Evolve Statement: ‘Vast Majority’ of Synapse Funds Are at Other Banks

Evolve Bank & Trust said Wednesday (Nov. 27) that the “vast majority” of end user funds related to the Synapse Financial Technologies bankruptcy that were once held by Evolve were moved by Synapse to other banks about a year ago, before the bankruptcy.

The bank continues to look for the money but can provide only a partial answer to end users because the data that’s available to it is limited, Evolve said in a Thursday Open Letter to Synapse End Users.

“We believe End Users deserve to know where their money is. Period,” Evolve said in the open letter. “To that end, we will continue to work to return the funds in our care to End Users in the appropriate amounts as quickly as we can. But we can only return End Users’ funds we hold.”

The bank said in the letter that Synapse placed money held on behalf of end users at many banks and directed the transfer of funds between those institutions. It added that Synapse was responsible for tracking these movements and maintaining accurate ledgers, but failed to do so.

Evolve’s current information came from a reconciliation process conducted by Ankura Consulting, and the bank began the process of disbursing $24.5 million in funds on Nov. 4 based on that information, according to the letter.

For other Synapse end users, Evolve can provide only a partial answer about where their money is, the letter said.

“We believe that the sharing of the transaction data by the other banks will help shed light on these funds and where they are,” the bank said in the open letter. “As we have said from the beginning, without a comprehensive review of transaction data from other institutions, it is hard to say what each other bank may hold for each individual End User.”

Synapse, a banking-as-a-service (BaaS) provider, collapsed in April and its subsequent ongoing fallout has expanded to include Evolve and three other banks, PYMNTS reported Tuesday (Nov. 26).

A Synapse bankruptcy trustee said in a Nov. 12 court filing that Synapse did not keep track of the money.

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