Synapse's missing funds: Evolve's reconciliation and payments

analysisEvolve engaged Ankura Consulting Group to reconcile the funds it held for Synapse Brokerage end users, using its own records, Federal Reserve data and information from the Chapter 11 trustee. In an update filed with the trustee's report of November 12, 2024, it said the reconciliation was completed on October 18, 2024; that on November 4 it e-mailed about 118,000 end users a link to a reconciliation website showing each user's reconstructed 'Synapse ecosystem balance' and 'Evolve payment' as of May 17, 2024; and that fewer than 4.3% had appealed by November 11. Evolve said Ankura's work showed Synapse's ledgers to be contradicted by Synapse's own transaction data, Federal Reserve data and the bank's records, that other partner banks had not joined, and that Ankura therefore could not say where funds were outside Evolve; it offered to share its transaction data with the other banks. ^{1 2}

analysisOn October 23, 2024 the bank announced that Rust Consulting would administer the payments. Founder Scot Lenoir said the bank had sorted through more than 100 million transaction records to evaluate 'the flawed ledgers from Synapse'. a fintech industry newsletter reported in February 2025, citing unnamed sources, that chief financial officer Mark Mosteller had overseen Ankura's work, which 'purported to show many Synapse end users were entitled to pennies on the dollar, or nothing at all, from Evolve'. ^{3 4 5}

analysisThe trustee's twelfth status report shows Evolve holding $46,926,558 of Synapse end users' for-benefit-of funds on May 24, 2024, of which $21,000,000 (44%) had been distributed by November 12, 2024, against 99% at AMG National Trust; across the four banks, $187.1 million of $219.0 million (85%) had been paid out. Evolve also reported paying $5.66 million of demand-deposit funds to 42,031 users of eight platforms. Users who had chosen how to receive the FBO funds from Evolve came from Juno, YieldStreet, Yotta and Clerkie. ¹

analysisThe trustee said Evolve, citing pending litigation, had declined to give her most details of its reconciliation, so she knew less about its expected distributions than end users did; she was disappointed in the results so far while recognising its substantial distributions. She kept her estimate of the shortfall across Synapse's partner banks at $65 million to $95 million; the CFPB's complaint gives her estimate as $60 million to $90 million. Neither estimate attributes the shortfall to a particular bank. ^{1 2}

analysisIn their section of the trustee's report, AMG National Trust and Lineage Bank said that, by their summary of Synapse-related transfers, about $957.6 million more had flowed into Evolve from them than out, gross totals that do not by themselves show what any bank owed users at the freeze. They called Evolve's suggestion that they might still hold substantial funds 'irresponsible and disingenuous' and cited Yotta users told to expect $579.00 from Evolve against a reconstructed balance of $282,100. Evolve's position is that its reconciliation showed Synapse's ledgers were wrong and that the other banks should share transaction data. A banking trade publication reported in April 2025 that the two banks had called an accurate reconciliation 'impossible' because of Synapse's bulk transfers, and that Lineage said it had returned about 99% of the funds it held. ^{1 2}

analysisIn a November 2024 open letter, according to a banking trade publication, Evolve said users had received, or chosen how to receive, more than $24.5 million, and told many of them that it held less than Synapse's ledger showed and that the missing funds were with other banks; AMG and Lineage denied holding substantial additional user funds. Senators cited cases from the press: a customer with about $130,000 in a fintech account told in November 2024 that Evolve held $1,182 in her name, and a Yotta customer with nearly $50,000 who recovered $1.49. ^{3 4}

analysisThe CFPB states that AMG began distributing funds in May 2024 and Evolve and Lineage in June 2024, and that in March 2025 the banks were still paying, mostly very small balances without valid addresses and returned payments. On January 8, 2026, some 607 days after the freeze, Evolve posted that Ankura's continued review had found more users migrated to Synapse Brokerage than previously disclosed and other ledger irregularities, and that it would pay certain users in the coming days; it did not disclose the amount, and a representative did not answer the newsletter's questions. ^{1 2}

analysisThe CFPB sued Synapse in its bankruptcy case in August 2025; the stipulated judgment of September 12, 2025 includes a ban on selling customer information and a $1 civil money penalty that lets the Bureau use its Civil Penalty Fund for harmed consumers. On November 28, 2025 it allocated $46,248,291 from the fund to eligible victims of the Synapse bankruptcy; California's regulator said in May 2026 that Yotta customers with a positive balance on May 17, 2024 might claim compensation but that the claims process had not begun. A Stifel analyst, according to a fintech industry newsletter, speculated that the allocation might reduce any net liability Evolve faces. ^{3 1 4 5}