by Pam Martens and Russ Martens at Wall Street on Parade
Exactly how long is it going to take federal banking regulators to figure out that “move fast and break things” – the business model of Silicon Valley financial technology (fintech) startups and their voracious venture capital backers – is the last thing that Americans want to be integrated into the FDIC-insured bank where they hold their money to pay their mortgage and to buy food to feed their children.
After one form of fintech – crypto – hastened the demise of several FDIC-insured banks in the spring of last year, handing billions of dollars in losses to the FDIC’s Deposit Insurance Fund, a rational person might have thought that federal banking regulators would have moved rapidly to shut down this lunatic banking model. But no. The story becomes ever more surreal today.
Below is the desperate plea filed on Tuesday with the court that is hearing the bankruptcy proceedings of the fintech firm, Synapse Financial Technologies. A father says his daughter has been working after school at a florist shop to save money for college and now finds that her $1,730 in deposits, ostensibly placed at FDIC-insured Evolve Bank and Trust by Synapse, have disappeared into a black hole.
Customers of another fintech,…
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