Yotta Technologies, a San Francisco-based savings and sweepstakes platform, has been ordered to pay a $1m penalty by California’s Department of Financial Protection and Innovation (DFPI) after regulators found it had systematically misled thousands of customers over the safety of their deposits.
The settlement follows a DFPI investigation that found Yotta had falsely marketed its accounts as FDIC-insured to around 18,000 California customers, before moving those accounts to Synapse Brokerage LLC — a firm that carried no such protection. Synapse subsequently filed for Chapter 11 bankruptcy in April 2024, leaving Yotta customers unable to access their money. When those customers attempted to file insurance claims with the FDIC, they found their accounts were unprotected, contrary to what Yotta had told them.
As part of the consent order, Yotta is also required to notify all California customers who held positive balances in their accounts as of 17 May 2024, providing them with details on how to seek compensation through the Consumer Financial Protection Bureau’s (CFPB) Civil Penalty Fund. A dedicated point of contact for consumer queries must also be established for 120 days from the date the order takes effect. The company is furthermore prohibited from making any further representations that customer deposits are shielded from all risk.
The DFPI’s investigation revealed that since May 2020, Yotta had been telling customers their money was “safe,” “FDIC insured,” and that...
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