Updated March 4, 2025
Synapse End Users:
As we move into 2025, we want to update you on ongoing efforts to work through the aftermath of the Synapse bankruptcy. Evolve continues to make forward progress with our portion of reconciliation and payments to affected End Users. Unfortunately, none of the Synapse ecosystem banks—AMG, Lineage, and American—have agreed to the data sharing necessary to complete the analysis and determine who holds End User funds.
To that end, today we are sharing with you the status of reconciliation efforts, including our work with the Synapse ecosystem banks, and we will try to correct a few misleading items that we have seen online recently.
OUR COMMITMENT TO A COMPREHENSIVE, ECOSYSTEM-WIDE RECONCILIATION
Let us start by addressing what we—and you—care about most: accurately determining where each End User’s funds are being held so that the right amounts can be returned to the right End Users.
Our commitment to End Users is unchanged. We believe End Users deserve to know where their money is. Period. To this end, we continue to work with the Synapse ecosystem banks to obtain the transaction data needed for Ankura to undertake the analysis to determine where End User funds are being held—using reliable data, not the discredited Synapse ledger.
We know this process has been difficult for everyone involved. We are frustrated too, and we are committed to answering this question for End Users once and for all. Part of the delay is that it is complex. Synapse created an infrastructure in which no one bank, fintech, or End User had all of the data, and Synapse’s own records were inaccurate. And, while we wish the process could move faster, ensuring every End User receives their proper allocation takes time, and we are confident that full participation from all stakeholders will help answer these key questions.
As you know, Evolve has and is funding Ankura Consulting’s work in conducting the reconciliation using Federal Reserve and Evolve transaction data to determine where End User funds are held. Through that reconciliation, we recalculated End Users’ true Synapse ecosystem balances, identified material errors in Synapse’s own ledgers, and then used that work to determine the portion of End Users’ balances held at Evolve.
But the puzzle is not complete. The goal is to identify where all End Users’ funds are held, and we are working hard to put the last pieces together. That requires all of the Synapse ecosystem banks—AMG, Lineage, and American—to share the transactional data necessary to complete the analysis. While we had made some initial headway, the Synapse ecosystem banks have not produced the data that Evolve has requested, and that Ankura needs, to complete the reconciliation for the other institutions.
We understand cost may be one factor limiting fuller participation from the Synapse ecosystem banks—AMG, Lineage, and American—in a holistic reconciliation. To that end, if we are provided access to the necessary data from the Synapse ecosystem banks, Evolve is prepared to continue to pay for the cost of having Ankura develop the process and analyze the other banks’ data and help determine—as it has for Evolve—where End Users’ funds may be located. We have already directed Ankura to undertake a review and analysis of the limited amount of data we have received from other Synapse ecosystem banks. Ankura is now underway with that work.
While our commitment goes well beyond what Evolve believes is its responsibility in this case, we know this is the fastest and simplest way for all End Users to know where their funds are and get them returned.
CONTINUING TO RETURN END USER FUNDS
Evolve continues to engage Ankura to assist the bank with ongoing data analysis and validation. In connection with data- sharing activities, Ankura confirmed additional institution-to-institution cash management transactions involving End Users’ funds held at Evolve. As a result, Evolve will be disbursing more funds to a subset of End Users on or about March 6, 2025, via PayPal and checks sent via the U.S. Postal Service.
This is good news for those individuals and—as we have said from August 2024—shows the importance of Synapse ecosystem banks sharing their transactional data with Evolve. It gives us optimism that as more data is examined, more funds will be accurately identified and returned to the appropriate End Users. If and when we receive the necessary data from the Synapse ecosystem banks, we expect the comprehensive, ecosystem-wide reconciliation will determine which banks hold End Users’ funds, how much each bank holds, and what still needs to be disbursed to End Users.
CORRECTING THE RECORD
Finally, an article regarding the Electronic Fund Transfer Act (“EFTA”) has been circulating online with claims that Evolve violated the EFTA by transferring money to Synapse Brokerage or other ecosystem banks at Synapse’s direction. Unfortunately, the article is misleading.
In opening an account with a fintech, every End User using a fintech platform within the Synapse program instructed Evolve to follow all instructions from Synapse or their relevant fintech platform to move money in or out of their (i.e., the End User’s) account at Evolve. This authorization was essential to the nature of the fintech relationship, as the fintechs would primarily interact with the customer through their app, and, along with Synapse, function as an authorized agent to relay instructions to Evolve. Evolve’s demand deposit agreement with End Users provides the following on page one in bold and capital letters:
“YOU UNDERSTAND THAT BY OPENING AN ACCOUNT THROUGH THE PLATFORM WEBSITE, YOU AUTHORIZE BANK TO ACCEPT ALL INSTRUCTIONS PROVIDED TO BANK BY PLATFORM OR SYNAPSE ON YOUR BEHALF.”
The transfers of End User funds to and from the Synapse Brokerage program were properly executed because Evolve complied with the deposit agreement by following the instructions it received from Synapse on each End User’s behalf. Additionally, as Evolve has stated repeatedly at the Synapse bankruptcy hearings, End Users can request their transaction history from Evolve through the reconciliationbyevolve.com website.
While the process for reconciling and recovering from the Synapse bankruptcy is taking longer than expected, we remain optimistic that with cooperation from the Synapse ecosystem banks, End User funds can be located and returned to their rightful owners.
Thank you once again for your patience.
Sincerely,
The Evolve Leadership Team
