Americans see their savings vanish in Synapse fintech crisis
cnbc.com
cnbc.com
Do I feel bad for the Fedex driver who lost her life savings? Yes, but like I keep most of my money in a relatively low risk low interest rate credit union. This exact decision making of "I'm going to go with this new-fangled tech startup with high interest rates" is exactly the kind of approach that gets you to risk your life savings. But it def. sucks that their approach seems to be praying on the vulnerable. It's one thing when someone on wallstreetbets loses their life savings. It's another thing when someone thinks their money is in a savings account.
But like, I'm at Yotta's website and the hero text is "Play games, win big". Not exactly a safe money vibe.
This is the biggest problem with the whole situation.
Consumers should be free to invest in whatever risk tolerance they choose, but it’s not okay if they’re under the impression that their investments/deposits are insured by the government.
This comes across as victim blaming, and I think it vastly overstates how "too good to be true" these interest rates are. Yotta's touted interest rate with their weird prizes is around 2.5% APY. Most of us were alive when this was a typical interest rate for a normal savings account, and given market growth it's not exactly unthinkable to get a 2-3% return. This isn't Bernie Madoff promising 20% annual returns.