Evolve Exec Pleads The Fifth in Missing Money Case, Bank Asks To Seal Deposition Transcript
Can bunq Succeed Where Other European Digital Banks Have Failed?
Hey all, Jason here.
For those in the States, happy Martin Luther King Jr. day. Hopefully, this day can serve as a moment of reflection at a tense moment in our country’s history.
For those of you who didn’t get a chance to make it through last week’s 5,500 word deep-dive on YC-backed Venezuelan crypto app Kontigo, Fintech Take’s Alex Johnson joined me for a bonus episode of Fintech Recap to discuss the story, what it means for the “stablecoin infrastructure” space, and the parallels to the problems we’ve seen in bank-fintech partnerships.
You can give that a listen on Apple Podcasts, Spotify, or where ever you get your pods.
This January 28th: Building the 2026 Roadmap for AML
Sponsored content: Banks and fintechs are moving beyond experiments—AI agents are flagging suspicious activity, drafting SARs, and making real AML decisions. But how do agentic AI solutions fit within AML operating models and escalation workflows? How do you maintain governance and explainability for regulators?
Jesse Reiss (Hummingbird), Jason Boova (Grasshopper Bank), and Peter Piatetsky (Castellum.AI) will discuss how compliance teams are building controls regulators will accept.
Evolve Exec Pleads The Fifth in Missing Money Case, Bank Asks To Seal Deposition Transcript
Hank Word, Evolve Bank & Trust’s former chief technology officer and the president of its “open banking” division when key third-party service provider Synapse collapsed into bankruptcy, can’t seem to escape the wreckage he left behind.
Word left Evolve in September 2025, as first reported by Fintech Business Weekly. His LinkedIn profile doesn’t indicate where or if he is currently employed.
But, despite leaving his role at the embattled bank, Word is still being called upon to answer questions about his time there — specifically, relating to Evolve’s disastrous relationship with Synapse, which left thousands of depositors unable to access their funds after the bank froze them on or around May 11th, 2024.
Word was recently deposed as part of one-time Synapse and Evolve client Yotta’s lawsuit against the bank.
The end users of Yotta, once a prize-linked savings neobank that has since transformed into a sweepstakes-gambling app, bore the brunt of the funds freeze, as it was the largest program still operating at Synapse when it collapsed. Significantly larger programs, like Brazilian banking startup Nomad and U.S. business banking firm Mercury — which is currently applying for an OCC national bank charter — moved off Synapse shortly before the company failed.
Yotta alleges that Evolve committed fraud and acted negligently by knowingly misrepresenting its ability to accurately track and reconcile user funds and misrepresenting the insured status of the deposits it held on behalf end users.
Though, to be clear, Yotta is suing Evolve on its own behalf. The company is the sole plaintiff in the case; Yotta is not suing on behalf of its end users, though the case may help shed light on still unanswered questions in the whole Synapse-Evolve disaster.
As part of the discovery process in Yotta’s case, it has been seeking access to documents Evolve holds and conducting depositions of current and former bank executives.
In a deposition in mid-December 2025, former Evolve CTO W. Christopher Staab gave testimony under oath related to the FDIC insured status of Yotta end users’ funds held at Evolve.
Recall that Evolve couldn’t accurately reconcile funds it held vs. Synapse’s ledgers, with Evolve’s open banking controller Chris Vendetti admitting in a 2022 email that balances tended “to differ a couple hundred million on the daily.”
According to Yotta’s portion of a joint discovery letter filed in the case in late December, Staab “testified that this discrepancy—which typically reflected a major shortfall—likely led Evolve to fail to obtain the necessary FDIC insurance.”
The former Evolve CTO “explained that Evolve was legally prohibited from insuring more funds than it was actually holding on behalf of end users; as a result, Evolve was likely forced to insure those funds that it was actually holding as opposed to the much larger amount of funds that it was supposed to be holding.”
According to the same filing, “When Evolve’s former president, Hank Word, was asked whether Yotta user funds were FDIC insured or Evolve did anything that jeopardized the FDIC insurance, he invoked his fifth amendment rights to avoid answering the questions.”
There are a number of categories of documents Yotta is asking the court to compel Evolve to provide:
documents sufficient to show the amount of Yotta and Synapse end user funds that were insured on a daily basis;
responsive, privileged documents that Evolve has declined to provide, citing that they contain personally identifiable information;
documents and code/business logic related to Ankura’s reconciliation efforts, including how the amounts that were returned to Yotta end users were calculated;
and attachments and/or linked documents from emails Evolve previously turned over.
Per the joint discovery letter, a witness for the bank testified that Evolve “does not know how Ankura calculated the amount that each user was entitled to.” (emphasis added)
In Evolve’s portion of the joint discovery filing, the bank pointed to its privacy obligations under the Gramm-Leach-Bliley Act, commonly known as GLBA, to justify its refusal to turn over documents containing end user PII to Yotta: “Evolve may not share non-public personal information with Yotta since it has not provided consumers an opportunity to opt-out or notified the consumer through its privacy policies that it would share nonpublic personal information with the third party.”
Evolve’s stated concern over protecting end user data privacy is hard to reconcile with the woefully inadequate safeguards that allowed the bank to be hacked by a Russian cyberransom group, Lockbit.
The group ultimately leaked terabytes of Evolve’s data on the darkweb, including not only Yotta end user data, but internal Evolve emails and bank employees’ personal files.
A representative for Evolve Bank & Trust did not respond to a request for comment for this story.
Hank Word did not respond to a request for comment sent outside of normal business hours.
600 Days Later, Evolve Still “Finding” More Money
Meanwhile, Evolve quietly released a statement on January 8th, 2026 — some 607 days after it froze end users’ funds on May 11th, 2024 — that it found some more money owed to end users.
Specifically, the statement says, “[O]ver the past year, Ankura, a world-class forensic accounting firm, has continued to review Synapse’s records. Their work uncovered additional issues, including more End Users being migrated to the Synapse Brokerage than previously disclosed, as well as other irregularities in the Synapse ledgers.
Following this additional analysis regarding irregularities in the Synapse ledgers, Evolve will be distributing funds in the coming days to certain End Users.”
A representative for Evolve did not respond to questions about what these “additional irregularities” were or the additional amount of funds that will be returned to end users.
The update makes clear that Evolve’s “reconciliation” efforts are ongoing — despite claiming during the Synapse bankruptcy, apparently falsely, that the bank had “completed” its reconciliation efforts more than a year ago, on October 18th, 2024.
A representative for Evolve did not respond to questions about why it has taken this long to conduct “additional analysis,” when the bank represented to the bankruptcy trustee, former FDIC Chair Jelena McWilliams, and, by extension, the court, that it had “completed” reconciliation in October 2024.
In a court filing last week, Evolve is requesting the court seal the transcript of the deposition of its open banking controller, Chris Vendetti, claiming it includes commercially sensitive business and end user information.
Former Evolve CEO “Boyscout” Bob Hartheimer Pleads Guilty On Child Porn Charges
The chief executive Evolve brought in to cleanup the Synapse mess, “Boyscout” Bob Hartheimer, was arrested in a dramatic FBI raid at the bank last October.
Hartheimer, a veteran of the FDIC who has also served as a strategic advisor to U.K. digital bank Monzo and a senior advisor to regulatory consulting shop Klaros Group, pleaded guilty to two child pornography charges last week.
Hartheimer admitted he used the dating and hookup app Grindr to solicit and send sexually explicit photos to and from a person he believed to be a 15-year-old boy. He has been charged with one count of attempted production of child pornography and one count of coercion and enticement of a minor.
Hartheimer’s sentencing hearing is scheduled for April 3rd, 2026.
Can bunq Succeed Where Other European Digital Banks Have Failed?
Netherlands-based digital-only bank bunq is making a second try to secure a U.S. national bank charter from the OCC. (Frustrating editors everywhere, the company’s name is stylized as “bunq,” with a lower case “b.”)
The profitable neobank — the first de novo bank in the Netherlands in approximately 35 years — first applied for a charter in the U.S. in 2023, but withdrew its application in early 2024.
At the time, a bunq spokesperson characterized the withdrawal as “merely procedural” and stemming from differing points view between American regulators and bunq’s home country regulator, the DNB.
While much of bunq’s business plan for its American expansion remains the same — a focus on offering consumer and business deposit accounts and credit cards to “digital nomads” and European expats, according the public portions of its charter application — there is at least one notable change.
In its original application, its proposed U.S. bank would have been a wholly-owned subsidiary of bunq B.V., the company’s Dutch entity.
The new application reflects a significant change to the ownership structure: the proposed bank’s holding company will be majority-owned and controlled by the bunq founder and CEO, Ali Niknam, personally, rather than as a subsidiary of the company’s existing Dutch entity.
The charter application notes that, “Although Mr. Niknam is a common ultimate owner, bunq US and US Holding will be organized, managed, and governed separately from bunq BV, thereby establishing a parallel-owned banking organization.”
Asked about the change compared to its initial 2023 application, bunq chief evangelist Joe Wilson told Fintech Business Weekly, “We have global ambitions and want to build in the US. After feedback from regulators, we decided that setting up a dedicated US holding company is the right approach for this. It sets us up for the long term, with a scalable and transparent setup that fits US expectations, as well as providing us with stronger local governance and aligning with how international banks are typically structured in the States.”
Euro Imports Have Struggled In American Market
European digital bank entrants to the U.S. market have been largely unsuccessful.
Berlin-based N26 launched in the U.S. in July 2019, but it failed to gain a meaningful foothold and completed its exit from the market by January 2022.
U.K.-based Monzo launched in U.S. in February 2022. Monzo still operates in the United States, but, with an undifferentiated offering, it has never reached escape velocity in a very crowded financial services market.
Perhaps the European entrant that has seen the most success is Revolut. The company does not disclose specific user metrics for the American market but does refer to it as a “key market.” Some industry estimates suggest that the U.S. accounts for about 10% of Revolut’s app downloads, which potentially could equate to low single digit millions of users in the U.S.
Revolut, known for its aggressive geographic expansion and product development velocity, offers a wider set of features than N26 or Monzo, including business accounts with multi-currency support and investing and roboadvisory. The company also enables users to send money peer-to-peer to other Revolut users, including those in other countries — a feature that is made more useful by Revolut’s geographic coverage and large user base.
It is worth noting that Monzo, N26, and Revolut, though chartered as banks in other jurisdictions, operate via bank partnerships in the U.S. — an important difference vs. bunq, which, if granted, will hold its own charter.
Does bunq Have What It Takes To Break Through In A Crowded Market?
While having its own charter changes the business model and economics, by itself, it is not a point of differentiation that consumers care about.
Tens of millions of consumers hold balances in and transact using Chime, Cash App, and Paypal/Venmo, despite the fact that none of these entities are banks.
bunq’s name and branding may get noticed in the U.S. market — but not necessarily in a positive way. Niknam, the bunq founder and CEO, has said the name means “nothing.”
But the English definitions of the homonym “bunk” include trash, junk, and rubbish.
Wilson, the company’s chief evangelist, reiterated bunq’s commitment to its branding as it expands into the U.S. market.
A bigger potential challenge may be differentiating itself in the market it seeks to serve.
Estimates put the European-born population already living in the United States at about 4.8 million people. Presumably nearly all of these people, depending on how long they’ve been living in the U.S., are already banked — meaning that bunq would need to provide enough reason to convince them to switch or to open a secondary account.
Only 70,000 to 80,000 Europeans per year are granted lawful permanent resident status (a “green card”), which is hardly a meaningfully large total addressable market.
The most recent available data is from 2023, but it seems likely that, in the current climate, European migration to the United States is more likely to decrease than to increase.
bunq has emphasized it will target select geographic markets to begin with, presumably those with higher concentrations of the European expats and digital nomads the bank plans to serve. According to the American Community Survey, the greatest concentrations of European-born migrants are in the New York, Los Angeles, and Chicago metro areas.
But to win over these existing 4.8 million European expats and new arrivals, bunq is competing with a broad set of players that offer consumer and business accounts and credit cards: established money center banks with branch presences in major cities, digital-only banking services like the aforementioned Revolut, and cross-border-focused offerings like Wise.
bunq has succeeded at winning over users across Europe, with the company claiming some 20 million across the continent after 10 years in operation.
But despite the company’s relative maturity and success across Europe, it is far from a full-service bank and its user interface lacks the polish of many of its digital-first competitors.
Though bunq’s current offering in Europe includes a “credit card,” the bank does not itself do any lending. The card is treated as a credit rather than debit card, as certain merchants (eg, rental cars, hotels) require a credit card, but it draws from a user’s deposit balance.
In fact, CEO Niknam has been a critic of the traditional bank lending model, arguing that it creates misaligned incentives between banks and their customers. Niknam has also suggested banks’ lending of consumer deposits can pose ethical concerns — for example, by financing fossil fuel development or weapons manufacturing.
In Europe, bunq has parked much of its deposit base at the European Central Bank — a challenging business model, given that its deposit facility rate was -0.50% as recently as 2019.
bunq did acquire Irish small business lender Capitalflow in 2021 as a means to put its deposits to work; it also purchased mortgages in the secondary market. In its hoome country of the Netherlands, the company partners with Dutch mortgage lender Tulp, though Tulp handles the underwriting and servicing of these mortgages.
bunq derives a significant share of its revenue from monthly service fees. Such fees are common for European banks, but may be somewhat of a tough sell in the American market, where there are plentiful “free” (no monthly fee) options for consumers and small businesses. Though this is changing to some extent, with consumers showing a willingness to pay a monthly fee for the right combination of features and perks, as exemplified by offerings like Robinhood Gold and Coinbase One.
The bunq app itself, however, lacks the polish of some of its potential competitors. Its UX can be charitably described as clunky — looking almost like a mockup made in PowerPoint (below left and center), with a nonsensical information hierarchy.
There’s also a demonstrable lack of attention to detail.
For instance, in a screen to setup a funds transfer to a recipient in the United States (above right), bunq refers to a “State or Province,” even though the United States has no provinces (Puerto Rico, Guam, etc. are “territories”), “Beneficiary Postcode” instead of ZIP code, and “Aba” instead of the commonly used and better understood “Routing number.”
The company has improved some of these elements in its most recent app update, but still lags the firms it will be competing with in the American market.
Still, bunq has time to improve and refine its offering before going live in the U.S. market. Even with the speedier charter and deposit insurance approvals from the current administration’s regulators, it will take time to stand up and operationalize a bank.
Hopefully bunq uses that time to pressure test its assumptions about who it’s serving — and how it plans to meet their needs.
Everything Else: Apple-JPMC Deal Puts Goldman’s Embarrassing Consumer Effort Behind It, Leopards Come From Banks’ Faces, CFPB & DOJ Withdraw Statement on Fair Lending for Non-Citizens
I still remember the day Marcus launched, Goldman Sachs’ much-hyped entry into the retail consumer space.
I don’t remember the actual date, but I do remember my boss anxiously hovering behind me, asking why, when people searched on Google (or it might’ve been Bing, or both, I honestly don’t remember) the search engine displayed a link for “Marcus Burgers” — apparently, a remnant from the prior domain owner, a Detroit restaurant best known for its rectangular burgers.
This being Goldman Sachs, it was a five-alarm fire.