this post was submitted on 22 Aug 2024
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491
Ex-bank CEO gets 24 years after falling for crypto scam, causing bank collapse (arstechnica.com)
submitted 2 months ago by [email protected] to c/technology
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[–] Blaat1234 2 points 2 months ago* (last edited 2 months ago) (2 children)

Plenty of people lost most of their retirement savings - FDIC only goes up to 250k which isn't enough for super frugal FIRE. And definitely not enough when you get old and medical bills are crazy high in Murica.

[–] idunnololz 2 points 2 months ago* (last edited 2 months ago) (1 children)

Ok so I decided to read into this a little more. On FDICs website it says all customer funds should be available backing up my assumption that no customer of the bank lost any money: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/heartlandtristate.html

It says:

The full balance of all deposit accounts has been transferred to Dream First Bank, N.A.

[–] Blaat1234 3 points 2 months ago

That contradicts statements on https://arstechnica.com/tech-policy/2024/08/ex-bank-ceo-gets-24-years-after-falling-for-crypto-scam-causing-bank-collapse/

Victims may never fully recover losses, DOJ says

In the community, people are still struggling to recover, Mitchell told NBC News, noting that some people lost up to 80 percent of their retirement savings. For at least one woman, retirement is impossible now, Mitchell said, and for another local woman, it has become difficult to pay for her 93-year-old mother's nursing home.

US Attorney Kate E. Brubacher said that it's hard to say when or if victims will be made whole again.

But it seems like they didn't let it fail completely and transferred all assets and most liabilities to Dream First Bank? That would be nice for the granny with more than 250K in the account.

[–] idunnololz 1 points 2 months ago

Actually 250k is the minimum for FDIC. Also I'm only basing my information on this single article but it says he stole 47 million and then the article goes on to say that FDIC absorbed the 47 million loss. Given this wording it sounds like every single dollar was covered.