Yotta Technologies
{{Short description|American fintech company}}
{{for|the web optimization company |Yottaa}}
{{Infobox company
| name = Yotta Technologies
| logo = Yotta savings logo.png
| type = Private
| industry = Financial technology
| founded = October 2019
| founders = Adam Moelis, Ben Doyle
| hq_location_city = New York City
| hq_location_country = USA
| key_people = Adam Moelis (CEO)
| services = Prize-linked savings account, fintech services
| website = {{URL|https://www.withyotta.com}}
| footnotes =
| number_of_employees =
}}
Yotta Technologies is an American financial technology (fintech) company that offers sweepstakes games, and that formerly offered a prize-linked savings account.
On May 11, 2024, due to the failure of Synapse, a fintech company on which Yotta depended, Yotta's customers lost access to the money held in their accounts. Because Yotta is not a bank, Yotta's customers were not entitled to deposit insurance.{{Cite magazine |last=Dayen |first=David |date=2024-05-23 |title=Fintech Fight Leads to Hundreds of Thousands of Frozen Accounts |url=https://prospect.org/economy/2024-05-23-fintech-fight-frozen-bank-accounts-synapse/ |access-date=2024-08-28 |magazine=The American Prospect |language=en-us}}{{Cite news |last=Copeland |first=Rob |date=July 9, 2024 |title=What Happens When Your Bank Isn't Really a Bank and Your Money Disappears? |url=https://www.nytimes.com/2024/07/09/business/synapse-bankruptcy-fintech-fdic-insurance.html |access-date=2024-08-28 |work=The New York Times |language=en-US}} {{asof|2024|11}}, depositors have been offered only some of the money they had provided to Yotta.
Savings account provider
File:Prize Linked Savings winner, 2021.jpg
Yotta was founded by Adam Moelis, the son of billionaire investment banker Ken Moelis, and Ben Doyle. The company was founded in October 2019, and its platform launched in July 2020. Early funders of Yotta include hedge fund manager Cliff Asness and Ken Moelis. In January 2021, Yotta announced that it had raised $13.2M in Series A funding, led by Base10 Partners, with additional funding from Y Combinator, Core Innovation Capital, and Slow Ventures.{{cite press release |title=Yotta Rewards Smart Financial Habits with a Chance to Win $10M to Encourage More Americans to Save |url=https://www.businesswire.com/news/home/20210128005876/en/Yotta-Rewards-Smart-Financial-Habits-with-a-Chance-to-Win-10M-to-Encourage-More-Americans-to-Save |access-date=June 28, 2024 | date=January 28, 2021 |work=BusinessWire}}{{Primary source inline|date=June 2024}}
Yotta originally offered depositors an interest rate of 0.2%, establishing a prize pool with the remaining deposit interest, with a top prize of $10 million. The top prize was later revised to $1 million, which was never won. New York Times columnist, Peter Coy, described Yotta as "a smart way to turn gambling into a virtue".{{cite news |last1=Coy |first1=Peter |title=A Smart Way to Turn Gambling Into a Virtue |url=https://www.nytimes.com/2023/07/28/opinion/gambling-prize-linked-savings.html |access-date=June 21, 2024 |work=The New York Times |date=July 28, 2023}} Customers receive sweepstakes tickets based on the size of their deposit.{{cite news |last1=Basak |first1=Sonali |title=Startup Bets People Will Save Money for a Chance to Win $10 Million |url=https://www.bloomberg.com/news/articles/2020-09-10/saving-money-startup-bets-people-will-do-it-for-a-chance-to-win-10-million |access-date=June 21, 2024 |work=Bloomberg |date=September 10, 2020}} One Yotta user won $500,000 in a September 2022 sweepstakes drawing.{{cite news |last1=Gelsi |first1=Steve |title=Fintech startup Yotta customer wins $500,000 in sweepstakes drawing |url=https://www.marketwatch.com/story/fintech-startup-yotta-customer-wins-500-000-in-sweepstakes-drawing-11664392918 |access-date=June 21, 2024 |work=MarketWatch |date=September 28, 2022}}
The company launched an influencer marketing campaign in 2022.{{cite press release |title=Yotta Launches Affiliate Program with Fintel Connect to Expand Reach of Rewards-Based Savings App |url=https://www.prnewswire.com/news-releases/yotta-launches-affiliate-program-with-fintel-connect-to-expand-reach-of-rewards-based-savings-app-301551174.html |website=PR Newswire |publisher=Fintel Connect |language=en}} Popular influencers helped drive growth in Yotta's customer base.{{cite news |last1=Mason |first1=Emily |title=Is Your Money Really Safe In An 'FDIC-Insured' Fintech Account? |url=https://www.forbes.com/sites/emilymason/2024/06/17/is-your-money-really-safe-in-an-fdic-insured-fintech-account/ |access-date=June 21, 2024 |work=Forbes |date=June 18, 2024 |language=en}}
=Funds availability issues=
Yotta relied on Synapse, a fintech company based in San Francisco, to make funds available for deposit and withdrawal to partner banks, such as Arkansas-based Evolve Bank & Trust. Following a dispute between Synapse and Evolve, Synapse filed for Chapter 11 bankruptcy protection in 2024, affecting customers of Yotta and at least 24 other startups. Adam Moelis told CNBC in June 2024 that 85,000 Yotta customers, with a combined $112 million in deposits, could not access their funds.{{cite news |last1=Son |first1=Hugh |title=Savings app CEO says 85,000 accounts locked in fintech meltdown: 'We never imagined a scenario like this' |url=https://www.cnbc.com/2024/06/01/synapse-bankruptcy-yotta-accounts-locked.html |access-date=June 21, 2024 |work=CNBC |date=June 1, 2024 |language=en}} Although the partner banks had deposit insurance through the Federal Deposit Insurance Corporation (FDIC), the FDIC has not intervened, because no bank has failed.
In a letter filed with a bankruptcy court on June 20, 2024, Evolve wrote that on April 11, eight banks held a total of $109 million in deposits for Yotta customers and that about a month later, one bank held $1.4 million of Yotta funds. Neither customers nor Evolve received funds in the intervening time. Moelis had said that, as of May 17, Evolve held $112 million of Yotta's customers' funds; Evolve disputes this.{{cite news |last1=Son |first1=Hugh |title=Nearly $109 million in deposits held for fintech Yotta's customers vanished in Synapse collapse, bank says |url=https://www.cnbc.com/2024/06/21/synapse-collapse-nearly-109m-in-yotta-customer-deposits-vanish.html |access-date=June 21, 2024 |work=CNBC |date=June 21, 2024 |language=en}} In September 2024, Yotta sued Evolve in the United States District Court for the Northern District of California, accusing the bank of conspiring with Synapse to take Yotta's customer funds.{{cite news |last1=Williams |first1=Claire |title=Yotta accuses Evolve of 'grotesque misconduct' in Synapse collapse |url=https://www.americanbanker.com/news/yotta-accuses-evolve-of-grotesque-misconduct-in-synapse-collapse |access-date=September 21, 2024 |work=American Banker |date=September 19, 2024 |language=en}}
In November 2024, 13,725 Yotta depositors said that they were being offered $11.8 million of their $64.9 million in deposits. Several depositors reported being paid less than 1% of the funds they had put into Yotta. A volunteer group, Fight For Our Funds, has been formed to advocate for additional reimbursements.{{cite news |last1=Son |first1=Hugh |title='I have no money': Thousands of Americans see their savings vanish in Synapse fintech crisis |url=https://www.cnbc.com/2024/11/22/synapse-bankruptcy-thousands-of-americans-see-their-savings-vanish.html |access-date=November 22, 2024 |work=CNBC |date=November 22, 2024 |language=en}}
Sweepstakes
In June 2024, Coffeezilla, a YouTube producer focused on financial scams, observed that Yotta had pivoted to offering casino-style games, including blackjack, dice, and roulette games, funded by microtransactions instead of savings account deposits.{{Cite AV media |url=https://www.youtube.com/watch?v=bBUkajbg688 |title=Youtuber Bank Wont Let You Withdraw Money |date=2024-06-03 |last=Findelsen |first=Stephen |access-date=2024-07-17 |via=YouTube}} The company changed its Twitter handle from @yottasavings to @winwithyotta, stopped paying rewards on its savings accounts, and shifted to promoting its sweepstakes games exclusively.{{cite news |last1=Holmes |first1=Christian |title=YouTuber-Backed 'Bank' Turned Sweepstakes Casino Yotta Has 85,000 Accounts Locked Up In Middleman Dispute |url=https://www.casinoreports.com/yotta-middleman-dispute/ |access-date=June 10, 2025 |work=Casino Reports |date=June 5, 2024}}
References
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