What really happened at Synapse according to Founder Sankaet Pathak

Lex is interviewing Sankaet Pathak, the former CEO and founder of
Synapse, and CEO and current founder of Foundation, to explore
what happened with Synapse, the banking as a service industry,
and key lessons learned. The discussion covers Synapse's origins,
the reliance on bank partners like Evolve, the discovery of
reconciliation issues and missing payments, and the eventual sale
of Synapse to TabaPay. Pathak shares details on the various
categories of "breaks" they uncovered, including debits from
customer accounts, undisclosed fees, and the challenges around
the Mercury migration. The episode also touches on potential
regulatory oversights, the role of blockchain technology, and
Pathak's perspective on his critics. The summary provides a
comprehensive overview of the issues faced by Synapse and the
broader implications for the banking infrastructure space.


 


MENTIONED IN THE CONVERSATION


 


Topics: BaaS, API, Open Banking, payments, banking, Fintech,
Embedded Finance, regulation


 


Tags: Synapse, Foundation, Evolve Bank, Mercury Bank, TabaPay,
Yotta, FDIC


 


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TIMESTAMPS


 


1’06: Synapse and the Evolution of Banking-as-a-Service: Sankaet
Pathak’s introduction


 


3’26: The Synapse Story: Inside the Banking Infrastructure and
Its Collapse


 


6’17: Behind the Rise and Reliance: How Evolve Bank Became
Synapse’s Key Partner


 


9’16: Uncovering Reconciliation Issues: How Synapse Detected
Problems with Evolve Bank


 


11’05: Tracking Customer Funds: How Synapse Managed User-Level
Data with Pooled Bank Accounts


 


14’41: Uncovering Payment Breaks and Fee Issues: The Challenges
Synapse Faced with Evolve Bank


 


21’16: Tracing Missing Funds: Synapse’s Financial Breakdowns and
Evolve Bank’s Alleged Deception


 


24’44: From Billion-Dollar Valuation to Fire Sale: The Synapse
Collapse and TabaPay Deal


 


29’04: Missing Millions: How a Migration Error with Mercury Led
to a $49 Million Discrepancy


 


33’37: Lessons from Synapse’s Collapse: Reflecting on What Could
Have Been Done Differently


 


39’10: Reflecting on Mistakes: Scaling Too Fast and the
Complexities of Synapse’s Brokerage Service


 


43’11: Rethinking Financial Oversight: The Need for Bank
Accountability and Direct Regulation of Bank-Adjacent Companies


 


45’59: Addressing the Critics: Sankaet Pathak on
Misunderstandings and Missed Opportunities in the Synapse
Collapse


Disclaimer here — this newsletter does not provide investment
advice and represents solely the views and opinions of FINTECH
BLUEPRINT LTD.


Contributors: Lex, Laurence, Matt, Farhad, Mike, Daniella


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