CFPB To Send $46 Million To Synapse Victims As Fund Runs Low

The Consumer Financial Protection Bureau (CFPB) has approved a plan to distribute just over $46 million from its Civil Penalty Fund to people whose money was frozen in the Synapse collapse, but that amount will cover only about half of the total estimated shortfall.​

What the CFPB is doing

• The CFPB will use its Civil Penalty Fund to compensate customers of fintechs that relied on Synapse (such as Yotta and others) whose accounts were locked after Synapse’s April 2024 bankruptcy.​

• The agency’s allotment decision, dated November 28, authorizes “just over $46 million” in victim payments, drawn from a fund that had roughly $118–119 million unallocated as of late 2024.​

How this compares to losses

• Partner banks and the CFPB have identified a shortfall between $60 million and $90 million(some reports say up to $95 million) between what banks actually hold and what Synapse’s ledgers showed for end users.​

• Because of that gap, many customers either never regained access to their funds or received less than their full balances during earlier bank-led reconciliations.​

Why the fund is “running low”

• The Civil Penalty Fund is financed by penalties the CFPB collects in enforcement cases, and it must cover victims across many unrelated cases, not just Synapse.​

• After prior major payouts (for example, in the Think Finance matter) and other commitments, the Synapse allocation of $46 million is being made from a pool that is already heavily drawn down, contributing to concerns that the fund is nearing its practical limits.​

What it means for affected customers

• For Synapse-affected users, this CFPB payout may be the primary or only realistic source of additional recovery, since the bankruptcy estate has effectively no money left and the Chapter 11 case was dismissed as “administratively insolvent.”​

• Individual recovery amounts will depend on how the CFPB allocates the $46 million across tens of thousands of impacted accounts, so many people are still unlikely to be made fully whole relative to their original balances.​