People are losing their lifesavings everywhere and the Synapse Collapse is just the tip of the iceberg. A lot of people are making extremely risky financial decisions involving Crypto Currencies, NFTs, and other get-rich-quick schemes.

I don’t have a lot of sympathy for people who lose their money to such schemes but the Synapse collapse and others like it are not of the same ilk. Fiscally careful investors are losing their money all over this country.

What is the Synapse Collapse?

I’m sure most of you haven’t followed the story of Synapse, fintech, and Yotta or even heard about it but I watch a few YouTube channels that cover this stuff regularly. That being the case, I’ll go over it briefly but for a detailed examination you should visit those channels and read the articles.

Basically, a company, Synapse, took money from a variety of investors all over the United States who deposited it with startup companies like Yotta and Juno. Synapse used something called fintech to deposit the money in Evolve Bank. By having the money in a bank backed by the U.S. Government, people assumed that it was safe.

Sadly, this turned out to be false. The money wasn’t deposited properly although there is still a great deal of confusion about what happened to it in the maze of transactions through fintech, Yotta, Juno, and Evolve Bank.

Where did the Money Go?

The money may never be found. It’s a maze of transactions without a clear trail. What’s clear, it is the money is gone. Regular folks deposited at least $64.9 million through Yotta although there are likely many more investors from different startups. Now they are being offered $11.8 million in payment returns.

That’s about an 80% loss for most investors. It is their life savings. It is college funds. It is retirement money. It is real life and real suffering.

Sympathy for the Gullible

I mentioned earlier that I don’t have a huge amount of sympathy for people who make risky investments. I personally consider the entire Synapse Collapse a bit of a risky investment but for a lot of people that required more financial sophistication than they had. They don’t have a great team of financial advisors like me.

While I don’t have a huge amount of sympathy for the risky investors, I still feel their pain. This is real suffering. These are real people and what happened to them is brutal, even if it was through their own decisions.

In many cases the foolish decision was believing the lies of a convincing scammer. This sort of thing isn’t going away any time soon.

The Regulatory Roll

Much as my fellow Libertarians will hate me for it, I do think government led regulatory organizations are way behind the Synapse Collapse. This is not an isolated incident. There are many potential problems brewing in the industry. Many have lost their money to scams, schemes, and even well-intentioned investment advisors.

We don’t want people to put their money in a bank and then lose it. It’s bad for everyone. Regulations have a role here in helping people recover money and preventing them from losing it.

Creating good and useful regulations is another matter and a topic for a different time. That being said, I’m on board to get regulatory organizations up to speed on the new paradigms we face in the financial world.

Tom Liberman