Senators urge Owners, VC's of Synapse to restore customers access to their money

A group of senators, including U.S. Senator Sherrod Brown, has called on Synapse's owners, partners, and investors to restore customers' access to their funds, which have been inaccessible since mid-May. The senators highlighted the responsibility of all parties involved, including venture capital firms, in ensuring the safety and accessibility of customer funds. Synapse, a banking-as-a-service startup, faced financial difficulties leading to layoffs and ultimately filing for Chapter 7 bankruptcy in May, liquidating its business. The senators expressed concern over a potential shortfall of $65 to $96 million in customer funds held by Synapse's partner banks. The senators criticized the banking-as-a-service model, citing the Synapse bankruptcy as evidence of its weaknesses. The situation at Synapse is part of a broader trend in the fintech industry, with other companies like Evolve Bank experiencing cyberattacks and data breaches. The senators urged all parties involved to collaborate in restoring customer access to their funds and emphasized the need to address the systemic issues highlighted by the Synapse case.