DFPI Secures $1 Million Settlement with Yotta Technologies for Deceptive Practices

What You Need to Know: DFPI takes action after a California fintech company deceives financial customers. Yotta is required to provide notice and documents to impacted Californians to assist with fund recovery.

SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) announced today that San Francisco-based Yotta Technologies (Yotta) must pay a $1 million penalty for engaging in deceptive acts or practices. An investigation determined that Yotta misled consumers by marketing its services as safe while falsely claiming that their accounts were insured by the Federal Deposit Insurance Corporation (FDIC). Yotta had moved these accounts to Synapse Brokerage LLC, which filed for bankruptcy shortly afterwards.

“Yotta blatantly deceived thousands of California customers regarding the risk to their accounts. It enticed customers to use its financial products and services under false pretenses, ultimately resulting in millions of dollars in lost funds. California will not tolerate these kinds of fraudulent practices and will hold those who flout our laws accountable,” said DFPI Commissioner KC Mohseni.

The financial penalty is intended to deter other companies from misleading consumers with similar false claims, which are violations of the California Consumer Financial Protection Law (CCFPL). This consent order is part of DFPI’s efforts to assist customers impacted by the Synapse Financial Technologies, Inc. (Synapse) bankruptcy obtain financial relief. As part of the order, Yotta shall also provide consumers with information regarding the possible recovery of their lost funds through the Consumer Financial Protection Bureau (CFPB) Civil Penalty Fund.

Background

A DFPI investigation found that, since May 2020, Yotta, a company that offered sweepstakes games and gave prizes to people who opened savings accounts with them, told 18,000 California customers their financial deposits were “safe,” “FDIC insured,” and that they “can’t lose” their money. In October 2023, Yotta moved its customer accounts to Synapse Brokerage LLC (Synapse)–a firm that did not provide FDIC protection—despite the fact that it had serious concerns about Synapse. Synapse offered Yotta technology and software that connected nonbank fintech platforms offering banking services to consumers with partner banks.

In April 2024, shortly after Yotta opened these brokerage accounts for its customers, Synapse filed for Chapter 11 bankruptcy. As a result of the bankruptcy filing, Yotta customers in California lost access to their funds. When consumers reached out to the FDIC to file insurance claims for their lost funds, they discovered their accounts were not FDIC-insured as Yotta had advertised.

The DFPI was the first regulator in the country to take formal action following the Synapse bankruptcy by swiftly revoking Synapse Credit LLC’s finance lending license in July 2024, and Synapse Brokerage LLC’s Broker-Dealer Certificate shortly thereafter.

In 2025, the CFPB set up a relief fund to compensate consumers harmed by the Synapse bankruptcy.

What Today’s Action Means

In addition to paying the financial penalty, Yotta must:

• Desist and refrain from engaging in deceptive acts or practices in violation of California law, including representing that cash deposits in Yotta accounts are protected against all risks.
• Notify all California customers with positive balances in their Yotta accounts as of May 17, 2024 with information regarding how they may obtain relief from the CFPB’s Civil Penalty Fund. See notice here.
• Designate a point of contact responsible for consumer inquiries for a period of 120 days from the effective date of the Consent Order.

You can read the full consent order here.

About DFPI

The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and by helping to prevent potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.