Risk register · entry
Q1 · PredictableSynapse / Evolve
'FDIC-insured' deposits froze when a ledger intermediary failed to reconcile.
Documented, foreseeable risks that were ignored anyway. The failure is attention, not information.
Why this room
The consumer-facing payoff looked simple and bounded (an insured deposit account), but the actual mechanism, sole-source ledger custody by an unregulated intermediary with no audit requirement, hid a fat, unbounded tail that only surfaces when the intermediary's own records turn out to be unreliable or fabricated, which is why the event reads as Q1 on the label and Q-F (fraud) underneath.
The record
- $265 million in frozen consumer deposits at collapse (May 2024)certain
- $65 to $95 million ledger shortfall identified by trustee Jelena McWilliamscertain
- Roughly 100,000 to 10 million end users affected across ~100 fintechs (estimates vary widely by source)uncertain
- Synapse filed Chapter 11 bankruptcy on April 22, 2024certain
- TabaPay's $9.7 million acquisition deal collapsed May 8-9, 2024certain
- Funds began freezing for end users starting May 11, 2024certain
- Jared Fread lost access to $62,460.79 in his Juno accountcertain
- CFPB filed complaint/adversary proceeding August 21, 2025; stipulated judgment entered September 12, 2025 with $1 civil penaltycertain
- CFPB allocated $46 million toward Synapse/Evolve victimslikely
- Synapse had raised just over $50 million in lifetime VC funding, including a $33 million Series B from Andreessen Horowitz in 2019likely
- Third-party reconciliation would have cost an estimated $2 to 3 million, per trustee McWilliamslikely
Sources
The book
This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.
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