A coalition of senators is calling on Synapse’s owners, as well as its bank and fintech partners, to immediately reinstate customers’ access to their funds. The senators have also implicated the company’s partners and investors in the disappearance of customer funds.
In a public letter shared on Monday, U.S. Senator Sherrod Brown (D-OH), along with Senators Ron Wyden (D-OR), Tammy Baldwin (D-WI), and John Fetterman (D-PA) highlighted the fact that customers of companies working with Synapse have been unable to access their funds since mid-May.
The letter was addressed to W. Scott Stafford, the president and CEO of Evolve Bank & Trust. It was also sent to major investors in Synapse and the company’s principal bank and fintech partners, including former CEO Sankaet Pathak and various venture firms and financial institutions.
Synapse, based in San Francisco, provided banking services for fintech companies to integrate into their platforms. However, after facing financial struggles and filing for Chapter 11 bankruptcy, customers have been unable to access their funds since May.
The senators stressed the collective responsibility of all parties involved, including venture capitalists, to ensure the safety and accessibility of customer funds. They urged immediate action to release the frozen customer deposits held by Synapse.
The senators expressed concern over the potential shortfall of funds owed to customers and criticized the banking-as-a-service model for failing consumers and businesses. They called for a resolution to restore customer access to their funds.
Recent events in the banking-as-a-service industry, including a cyberattack on Evolve Bank and data breaches affecting partner companies, have further highlighted the vulnerabilities of the system. techCrunch has reached out to stakeholders for comment, but Evolve Bank declined to respond.
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