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Evolve Bank & Trust
Bank based in Arkansas, USA From Wikipedia, the free encyclopedia
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Evolve Bank & Trust, formerly First State Bank,[4] is an American bank headquartered in West Memphis, Arkansas.
In 2024, Evolve Bank faced scrutiny due to freezing funds of certain fintech customers, including Yotta and Juno, which restricted access to over $100 million held in customer accounts. This incident attracted public attention as many impacted customers eventually received only minimal fund access, leading to widespread frustration and media coverage.[5]
Evolve's Chief Marketing & Communications Officer resigned in October 2024, citing his "integrity and well-being" as a cause. [6]
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History
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Early years
Founded in Parkin in 1925 as First State Bank,[7] the bank provided loans to local farmers in Cross County, Arkansas. In 1934, it became a member of the Federal Deposit Insurance Corporation.[4]
2005-present
In 2005, First State Bank was renamed to Evolve Bank & Trust[4] after a group led by Chairman Scot Lenoir acquired it. The bank then relocated its banking charter to West Memphis.[7]
In 2017, Evolve established its Open Banking division to provide Banking-as-a-Service.[7] Evolve serves as the partner bank for fintech companies like Branch, Marqeta,[8] Mercury,[9] and Stripe.[10] Evolve Open Banking also provides card services offerings, allowing companies to white-label Mastercard, Visa, and American Express cards.[11]
In June 2024, the Federal Reserve Board issued an enforcement action against the bank for deficiencies in their anti–money laundering, risk management, and consumer compliance programs.[12][13]
Also, in June 2024, Evolve announced it was the victim of a data breach by the cybercrime group LockBit.[14][3][15] Some of its corporate fintech clients, including Affirm,[16] Mercury[17] and Wise[18][19] also announced their customers were affected by the breach.[20]
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Freezing of customer withdrawals and fraud allegations
In September 2024, Evolve's partner Synapse Financial Technologies accused the bank of misappropriating customer funds.[21] Synapse, which had filed for bankruptcy that spring, had served as a banking as a service platform linking Evolve to fintech apps like Yotta and Juno.
Following Synapse’s bankruptcy in April 2024, Evolve froze customer withdrawals from these partner apps, citing accounting discrepancies that made it unclear which funds belonged to which users.[22] The freeze lasted five months, during which tens of thousands of customers were locked out of their accounts.[23] Even after reconciliation, tens of millions of dollars remained missing.[24]
Users formed advocacy groups like Fight For Our Funds[25] and Reddit’s r/yotta[26] to push for restitution. Based on submissions to fightforourfunds.org, an estimated $49,337,925 was lost by 6,389 users.[27]
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References
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