Evolve Bank Faces Lawsuit Over $112M Customer Funds Crisis

A billion-dollar US bank is facing a lawsuit for allegedly mishandling customer funds, exacerbating a crisis that has left 85,000 customers unable to access their savings.

Yotta Technologies has filed a lawsuit against Evolve Bank & Trust, accusing the bank of fraud, conspiracy, and negligence. Yotta Technologies offered a high-yield savings product, depositing customer funds with Evolve for safekeeping. However, 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 that Evolve executed over $25 million in unauthorized and hidden transactions, draining funds from Yotta customers’ accounts, including direct transfers to Synapse. This action allegedly violated banking rules and customer trust, contributing to an overall shortfall of $65 to 95 million. Yotta’s investigation suggests that Evolve and Synapse conspired to take the funds without authorization, violating responsible banking practices and basic morality. These transactions were never authorized by customers, and Evolve had no right to take this money from customers without informing Yotta or its customers.

Evolve has blamed Synapse for the situation, stating that Synapse provided inaccurate account data. Despite this, Evolve has begun repaying some customers, with about $11 million of the $59 million owed to 13,300 respondents paid out, amounting to approximately 18 cents per dollar.