Savings app CEO says 85,000 accounts locked in fintech meltdown: ‘We never imagined a scenario like this'

For three weeks, 85,000 customers with a combined $112 million in savings have been locked out of their accounts, according to the CEO and co-founder. The disruption, caused by a dispute between fintech middleman and a bank, has severely affected the customers. The crisis began on May 11 when a dispute between two of the startup’s banking partners led to the lockup of accounts. The ongoing mess has exposed the risks in the fintech industry and regulators are now increasing scrutiny of the space. The issue has impacted numerous lesser-known consumer fintech firms. The CEO estimates that at least 200,000 customer accounts are locked. The CEO believes that regulators have allowed the situation to play out due to the issue’s limited scope and the affected customers not being wealthy. The Federal Reserve and the Federal Deposit Insurance Corp. have declined to comment on the issue. There is hope that a partial release of funds may be coming soon.