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by blakeburnette
749 days ago
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Regarding FBOs, that is exactly what is happening with Synapse/Evolve. Customer funds and corporate funds were all comingled and reconciled across an inaccurate ledger held within an FBO. Whether the inaccuracies belong to the bank, or to Synapse is where the debate lies. What is also incredibly suspect in this case is that Mercury was able to transfer (IIRC) 49 million USD of money from Synapse's established FBO with Evolve to Evolve directly (under the ownership of Mercury). The ability for Mercury to have moved these funds is a massive red flag. Regarding regulators and obligation -- in any of these relationships the bank is ultimately responsible/liable for any AML/TFL, money, etc... irregularities. A BaaS provider can effectively do everything wrong to the point its underlying bank is shut down, and switch to a different partner bank. |
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Ugh. The bankruptcy court has to bring in forensic auditors, they try to reconstruct who owns what, and it takes a long time to sort things out. The bank's responsibility is only to have the total amount on deposit available to the bankruptcy court.
This is a really good argument for not using such a service.