in Newswire Published on April 11, 2025

Class Action Lawsuit Claims Evolve Bank & Trust, Lineage Bank Mismanaged Consumer Deposits Affected by Synapse Bankruptcy

Justus v. Evolve Bank & Trust et al.

Filed: April 4, 2025 ◆§ 2:25-cv-02385

A class action accuses Evolve Bank & Trust and Lineage Bank of mismanaging consumers’ funds prior to and in the wake of Synapse’s bankruptcy in April 2024.

Defendant(s)

Evolve Bank & Trust Evolve Bancorp Inc. Lineage Bank

Law(s)

State(s)

Tennessee

Categories

Business/Finance Fraud

A consolidated class action lawsuit accuses Evolve Bank & Trust, holding company Evolve Bancorp Inc. and Lineage Bank of mismanaging consumers’ funds prior to and in the wake of Synapse Financial Technologies’ bankruptcy in April 2024.

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The 18-page proposed class action lawsuit alleges that following the collapse of Synapse—which had acted as an intermediary between various fintech platforms and the banks that hold their customers’ funds, such as Evolve and Lineage—it was revealed that the defendants had failed to properly account for cash deposits and maintain accurate ledgers, resulting in substantial ledger discrepancies in customer account balances.

The case contends that Evolve and Lineage have failed to return consumers’ funds in a timely manner despite claiming they are working to fix the incorrect ledgers.

As a result, thousands of users have for months been without access to their funds and unable to pay bills or living expenses, the filing charges.

After Synapse filed for bankruptcy on April 22, 2024, it was revealed that approximately $85 million in customer funds belonging to 100,000 people was unaccounted for, the suit relays. Evolve, Lineage and Synapse’s other partner banks have since been “blaming each other for the inability to unwind Synapse’s ledger and fully reconcile missing user funds,” the lawsuit claims. In some cases, the suit shares, the banks have purported that all deposits have been distributed already.

However, the case alleges that the defendants have not returned customers’ funds in full and have instead offered users only a fraction of their deposits back.

For example, the plaintiff, a South Carolina resident and user of fintech platform Yotta, says he attempted to withdraw his deposited funds on May 11, 2025 but had his transfer canceled. At the time of his withdrawal request, his account showed a balance of $4,420.50, the complaint relays. The man claims that months later, he received just $3.46 in reconciliation.

The plaintiff appealed the deposit, but the appeal was rejected, the filing states.

According to the Evolve and Lineage lawsuit, the banks’ inability to account for and provide instant access to consumer funds comes down to serious risk management missteps.

“Banks are expected to maintain contingency and business continuity plans that address the potential failure of critical third parties. Synapse was clearly such a critical third party, and yet none of the Defendants had a plan in place for what to do in the event of operational issues at Synapse—let alone failure. … Defendants’ lack of direct bank access to Synapse’s ledger, lack of contingency planning, and failure to maintain their own copy of the ledger all contributed to their respective failures to fulfill the most fundamental responsibility in banking: to keep track of the money.”

The lawsuit looks to represent all United States residents who have been denied access to their funds held by Evolve Bank & Trust or Lineage Bank since April 22, 2024.

Learn all about the legal process: What is a class action lawsuit?

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