Some of thousands who experienced 'frozen funds' through high-yield savings app getting refunds

CHICAGO (WLS) -- Some who experienced "frozen funds" and were unable to access money through a high-yield savings app are now getting their money back.

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One local man says he got most of his money back. But another local man says he's still out thousands.

Meanwhile, the bank at the center of this financial mystery recently issued an update.

"A week later I got a check in the mail," Brendan Murphy said.

Murphy of Lindenhurst is getting his money back after depositing nearly $2,800 through the Yotta high-yield savings app, which used Evolve Bank and Trust, backed by the Federal Deposit Insurance Corporation, or FDIC. His money was frozen, but now Murphy says he received checks for almost a full refund.

"I'm really happy I got almost all my money. I'm definitely luckier than a lot of people," Murphy said.

Murphy is talking about people like Konstantin Tarnorutskiy of Vernon Hills.

"And then a week went by, no withdrawal, two weeks, no withdrawal. I tried taking all of my money out just to be safe, and then all the transactions got canceled," Tarnorutskiy said.

Tarnorutskiy says his balance of more than $7,400 disappeared, and he still hasn't received a dime.

"The money doesn't exist. It's not held at Evolve. They're saying the money doesn't exist," Tarnorutskiy said.

Both men are some of the 85,000 customers who Yotta says were locked out of their accounts in May of 2024.

It's all tied to the collapse of Synapse Brokerage.

That's the middleman that the Yotta app and Evolve bank relied on to manage user funds.

In a recent update, Evolve Bank claims there were alarming discrepancies: saying Synapse was sending one statement to Evolve and a different one to end users. Evolve says Synapse ledgers were inaccurate.

Synapse, its bankruptcy attorney and its bankruptcy trustee have not responded to requests for comment.

Former Illinois resident Zack Jacobs lost $100,000.

"Yeah, I mean, it's like losing a house," he said.

Jacobs says he recently got 99 percent of his money back from Evolve.

He created the website www.fightforourfunds.org, which brought together thousands of people who have had tens of millions of dollars frozen.

Evolve says it continues to work with Synapse and other partner banks to locate the missing funds and that it's using transaction data from the Federal Reserve.

In a lawsuit, Yotta is pointing the blame at Evolve.

Evolve filed a motion to dismiss the lawsuit, blaming Synapse. According to a recent court filing, that lawsuit has now been dismissed.

Those affected can file a complaint with the FDIC and Federal Reserve.

Banking complaints in this case can also be filed with the Arkansas State Bank Department.

Visit www.usa.gov/bank-credit-complaints for more information.