Lawsuit dissolution sought by Evolve in relation to Yotta
In a shocking turn of events, Evolve Bank & Trust is embroiled in a lawsuit filed by fintech company Yotta, alleging that the bank misappropriated or misplaced tens of millions of dollars in customer funds. The lawsuit, which also implicates Yotta's former partner Synapse, claims that Evolve breached its fundamental duty to safeguard these funds.
The lawsuit states that over a four-year relationship, Evolve suddenly suspended access to all monies belonging to Yotta's customers and unlawfully debited customer accounts by over $25 million without customer authorization, which should not have been charged as fees. Yotta alleges that Evolve and Synapse collectively misappropriated about $50 million.
The complex operational arrangement between Evolve and Synapse saw customer funds being custodied at Evolve, with Evolve handling some transaction processing and Synapse handling other transactions involving those funds. This intricate relationship suggests that Synapse's role intertwined with Evolve's custody and electronic processing of customer assets, implicating both entities in the misappropriation allegations.
The case arises amidst Synapse’s bankruptcy and regulatory scrutiny, with the Consumer Financial Protection Bureau (CFPB) seeking to hold Synapse accountable for missing customer funds. However, Evolve has filed a request for dismissal of the lawsuit. Yotta has renewed its claims, even accusing Evolve of running a Ponzi scheme connected to the loss of millions in customer funds.
A website called Fight For Our Funds, created by and for Yotta customers, reports that $40,287,067 is still owed to 4,803 customers. Several affected customers collectively sued the banks in November, alleging fund mismanagement.
Evolve Bank & Trust could not comment on its request for dismissal due to active litigation. It is important to note that Synapse, being in bankruptcy proceedings, is immune from suit. The incident has also affected customers at fintechs Yotta, Juno, and Copper, who were unable to access tens of millions of dollars held in Synapse's partner banks, which included Evolve.
This elucidates the core allegations and the operational link between Evolve and Synapse as alleged by Yotta. The case remains ongoing, with significant implications for both Evolve Bank & Trust and the fintech industry as a whole.
[1] Yotta's lawsuit against Evolve Bank & Trust [2] CFPB's pursuit of Synapse [5] Evolve's copying of Synapse’s AWS data for ongoing case management
- The fintech company Yotta has filed a lawsuit against Evolve Bank & Trust, alleging that the bank misappropriated or misplaced tens of millions of dollars in customer funds, which also involves the banking and insurance sector and fintech industry.
- Amidst the ongoing lawsuit, Evolve Bank & Trust is reported to have copied Synapse’s AWS data for its case management, implying potential involvement of fintech companies in the electronic processing of customer assets.
