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A billion-dollar US bank is being sued for allegedly mishandling customer funds and worsening a crisis that locked 85,000 customers out of their savings.
Yotta Technologies is accusing Evolve Bank & Trust of fraud, conspiracy, and negligence.
Yotta offered a high-yield savings product, depositing customer money with Evolve for safekeeping.
But in May 2024, after Evolve’s fintech partner Synapse filed for bankruptcy, 85,000 Yotta customers lost access to $112 million in savings.
Yotta claims Evolve quietly executed over $25 million in unauthorized and hidden transactions, taking the funds from Yotta customers’ accounts, including direct transfers to Synapse. Yotta says this violated banking rules and customer trust and contributed to an overall shortfall of $65 to 95 million.
“Yotta’s investigation indicates that Evolve and Synapse conspired to simply take it, in violation of responsible banking practices and basic morality…
These transactions were never authorized by customers. Evolve had no right to take this money from customers and never informed Yotta or its customers that it was doing so.”
Evolve blames Synapse for the mess, saying Synapse gave inaccurate account data.
Evolve has started repaying some customers, with about $11 million of $59 million owed to 13,300 respondents paid out for about 18 cents per dollar.
