The Plumbing: Core Systems, Ledgers and Open Banking

Around 11 May 2024, Synapse Financial Technologies switched off the services it provided to the fintech apps and banks that depended on it. The San Francisco company, founded in 2014 by Sankaet Pathak and backed by Andreessen Horowitz, had filed for Chapter 11 on 22 April with a plan to sell itself to TabaPay for about $9.7 million. TabaPay withdrew in May, each side blaming the other, and Synapse had no money to keep running. Its software had sat between apps such as Yotta, Juno and Copper and four small banks, Evolve Bank & Trust, Lineage Bank, AMG National Trust and American Bank. The banks held end users' money in pooled "for benefit of" accounts. Only Synapse's ledger recorded which end user owned which dollar. When the ledger went dark, the banks froze the accounts, and more than 100,000 people lost access to about $219 million of savings and spending money (trustee). Yotta alone had about 85,000 users frozen (reported).

The court appointed Jelena McWilliams, a former chair of the FDIC, as trustee. In June 2024 she reported that end users were owed about $265 million while the banks could find about $180 million; later estimates put the gap at $65–96 million. Deposit insurance did not help, because no bank had failed. The Federal Reserve put Evolve under a cease-and-desist order on 14 June 2024. The CFPB obtained a $1 judgment against Synapse in September 2025, the device that opened its Civil Penalty Fund, and on 28 November 2025 allocated $46,248,291 to victims. The bankruptcy was dismissed on 12 November 2025 without the shortfall being explained. This chapter explains the plumbing under every financial product, why the ledger is the product, and how the firms that connect the pipes, of which Plaid is the largest, earn their living.