Evolve Bank & Trust
| Company type | Subsidiary |
|---|---|
| Industry | Financial services |
| Predecessor | First State Bank |
| Founded | June 5, 1925 |
| Headquarters | , |
Number of locations | 26 |
Key people | W. Scott Stafford (CEO) |
| Products | Evolve Open Banking |
| Parent | Evolve Bancorp Inc. |
| Website | www |
Evolve Bank & Trust, originally known as First State Bank, is a financial institution based in West Memphis, Arkansas, United States.
In 2024, the bank encountered substantial criticism after it suspended access to funds belonging to fintech clients such as Yotta and Juno, thereby restricting withdrawal capabilities on accounts holding over $100 million. This action generated widespread public discontent as numerous customers were granted only partial access to their money, attracting significant media scrutiny.
Subsequent to this incident, the Chief Marketing & Communications Officer at Evolve stepped down in October 2024, citing issues related to his "integrity and well-being."
Early years
The bank was established in Parkin in 1925 under the name First State Bank, initially focusing on providing agricultural loans to farmers in Cross County, Arkansas. It joined the Federal Deposit Insurance Corporation in 1934.
2005-present
Following an acquisition led by Chairman Scot Lenoir in 2005, First State Bank was rebranded as Evolve Bank & Trust and shifted its charter to West Memphis. In 2017, the bank introduced its Open Banking division aimed at delivering Banking-as-a-Service solutions. This initiative involved collaborations with fintech firms including Branch, Marqeta, Mercury, and Stripe. Additionally, Evolve’s Open Banking platform supports white-label card programs for Mastercard, Visa, and American Express.
In June 2024, the Federal Reserve Board imposed an enforcement action on Evolve due to shortcomings identified in its anti–money laundering controls, risk management framework, and consumer compliance processes. That same month, Evolve revealed it had suffered a data breach perpetrated by the cybercriminal group LockBit. Several fintech corporate clients such as Affirm, Mercury, and Wise reported that their customers were affected by this security incident.
Suspension of customer withdrawals and allegations of fund misappropriation
In September 2024, Synapse Financial Technologies—Evolve’s partner—accused the bank of improperly handling customer funds. Synapse, which had declared bankruptcy in April 2024, operated a banking-as-a-service platform that linked Evolve with fintech applications including Yotta and Juno.
Following Synapse’s insolvency, Evolve imposed a freeze on customer withdrawals from these affiliated apps due to accounting irregularities that complicated the determination of fund ownership. This freeze persisted for five months, preventing tens of thousands of users from accessing their accounts. Despite subsequent reconciliations, tens of millions of dollars remained unaccounted for.
Impacted customers organized advocacy efforts such as Fight For Our Funds and the Reddit community r/yotta to demand compensation. According to submissions collected at fightforourfunds.org, losses total approximately $49,337,925 across 6,389 claimants.