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“Play Games. Win Big.” seems to be their current website’s slogan. In your archive link the same text instead reads “Banking for Winners”, which helps explain

• dehrmann 2y ago
  > bad interest rate That link shows 2.7% in Sept., 2023. It should have been more like 5%. The yellow flag should have been the sketchy "win prizes" part of their offering that the article didn't really mention. What's this pseudo bank's innovation? A raffle? I still agree that weren't actual signs of sloppy accounting customers should have seen, and as it really does look like customer funds were supposed to get deposited in an actual bank.
  • gruez 2y ago
    >What's this pseudo bank's innovation? A raffle? Who cares if it's just "a raffle"? Some behavioral economics research suggests it's a good way to get people to save, and it's not something offered by mainstream banks. https://en.wikipedia.org/wiki/Prize-linked_savings_account https://en.wikipedia.org/wiki/Prize-linked_savings_account
    • FactKnower69 2y ago
      Disgusting, infantilizing worldview. Fix the culture instead of chasing it. These imbecilic "behavioral economists" can't wait to live in a world where you get a Free* Grimace Shake with every root canal at participating McDonalds(R) McDentists™.
      • gruez 2y ago
        >Disgusting, infantilizing worldview. Fix the culture instead of chasing it. Easier said than done. If you think it's so easy to change behavior, run an economics experiment to prove it. You'll probably even win a nobel prize. In the meantime, I'm going to support whatever actually works, rather than holding out for an ideal solution
  • mehlmao 2y ago
    Not sure what Yotta is like now (or was in 2023), but it used to be a very good rate. I think I opened my account in early 2020. Went back and checked my notes for details: Every week, you would get a lottery ticket for every $25 in your account. In July 2020, expected value for a ticket was $.0227 ($.0157 if you exclude the jackpot, Tesla, and other top prizes that you were statistically unlikely to ever win). They also paid out a base APY of .20%, which was higher than savings accounts at a lot of big banks. Adding those together, the APY came between 3.51% and 5.02%, which was good compared to most banks at the time. Over time they made changes which decreased the expected value of each ticket, I closed my account in 2021 when the rate was no longer competitive. Looks like I quit at the right time.
• K0balt 2y ago
  In finance, you should never assume incompetence over malice. It very rarely works out that way. Malicious incompetence maybe. This is probably a rug pull in a system designed for money laundering. They can’t figure out where money came from or who it belonged to…. I don’t think that happened out of the blue using standard accounting practices. By mixing non-bank money companies and traditional banking services, you can construct an effectively opaque and ultra efficient system to obfuscate the origins of funds, all without deviation in an obvious way from what looks like standard accounting. All of the best money laundering happens in plain sight within the banking industry through clever constructions. AML rules are just there to eliminate the competition. My guess is that it was time to shut down and the fingerprints had to be burned. Maybe no customer money was stolen, but the data of who has what money and who it belonged to might be hopelessly obfuscated in the process of obfuscation of their primary activities. This is not likely an example of sloppy accounting, but rather of very, very clever accounting and orchestrated fraud to make money disappear out of an otherwise well designed system of accounting. The real question is where did the fraud propagate out of? What was the exploit, what was the systemic vulnerability, and who exploited it? There is a huge incentive in fintech to create “legitimate products“ where John Q. Public deposits funds that just happen to be very useful for money laundering when combined with some other, apparently unrelated activity or similar lever that only an insider knows how to pull. It works fundamentally like a cryptocurrency coin mixer, without the hassle or suspicious profile. Shifting burdens of documentation often have gaps where things can “get lost” and shell companies that act only as conduits and never hold funds can evaporate with little accountability. Often, “unknowing” accomplice banks are left holding the bag…but all you have to figure out is where to repatriate the money that people will come looking for, the flows you know no one is going to come asking about effectively never happened. Meanwhile it’s very easy to take a margin of 10 percent or more of the flows. And they aren’t small flows. It’s a multibillion dollar market. The demand and the incentives are absolutely spectacular. For the most part, these crimes are invisible to the public, very difficult to prosecute, and effectively impossible to garner the political support to even launch an investigation into, for reasons. I hope the hapless victims at least get their money back some day.
  • zaphar 2y ago
    I disagree with this previous premise: In finance, you should never assume incompetence over malice. It very rarely works out that way. Malicious incompetence maybe. I suspect it's informed more by confirmation bias fed by the news cycle than actual facts. And Misty likely the rule of thumb featuring incompetence still holds.
• UltraSane 2y ago
  The core issue seems to be that a company named Synapse was a middleman to a lot of fintech startups and spread money around various banks but didn't actually keep very accurate records of balances. Evolve bank noticed this and hired a fancy consulting firm named Ankura to reconcile 100 million transactions. But most of the money is still lost in the various banks that Synapse used. The core issue is why is it so hard to use Synapse's records to find where the money is? And the various banks that Synapse used should be able to work together to reconcile the money. I wonder if most the missing money was just embezzled.
  • IggleSniggle 2y ago
    Totally sounded like embezzlement to me too. Somebody at Synapse making the records intentionally unreconcilable/vague somewhere in the accounting chain so that they could claim some portion of that as their own. I guess it could be gross incompetence, but the embezzlement story actually seems more plausible in this scenario, especially given the animosity between the corporate parties involved. Maybe an incompetent CEO at Synapse who really believes the vague numbers they were given that doesn't line up well with the other banks' own records. The fact that there was a lottery system baked in that grabbed from a pool of "cash winnings" that was financed by the interest rates of deposits at other banks just adds to the opportunities for embezzlement. An employee "gets lucky" with the gambling setup a few times with a pot that is non-attributable, says more money needs to get transferred to the pot because somebody won a payout, etc
    • anon84873628 2y ago
      The current lack of collaboration between the banks makes it seem like they believe this too. The ones that had funds paid out already so they could avoid holding the bag. Whereas Evolve is the last one standing when the music stopped and is now taking the reputation hit.
    • UltraSane 2y ago
      In finance the usual rule is flipped, and you should never attribute to incompetence that which can be explained by greed.