The crypto contagion continued this week with BlockFi being the center of attention. There was also news from FTX on Robinhood, Celsius continued to flounder, Three Arrows Capital is toast, and amid all this turmoil the EU agreed to a crypto regulatory framework. Here are what I consider to be the top ten fintech news stories of the past week.
FTX signs a deal giving it the option to buy crypto lender BlockFi from CNBC – There were a lot of rumors swirling around BlockFi this week with one report suggesting that FTX was acquiring the company for just $25 million. That was denied by CEO Zac Prince but we got news late Friday that a deal had been signed with FTX that gave the company an option to buy BlockFi at a maximum price of $240m. The $250 million credit facility was also upsized to $400 million.
Bankman-Fried’s FTX says no talks to acquire Robinhood from Reuters – We began the week with the news that Sam Bankman-Fried (the FTX founder) was looking to acquire Robinhood (according to Bloomberg) but that proved to be only a rumor as SBF said there “are no active M&A conversations with Robinhood”. Not a complete denial but nothing appears imminent.
EU Sets First Rules to Regulate Cryptocurrencies from The Wall Street Journal – The European Union becomes the first major western economy to create a regulatory framework for crypto. Under the Markets in Crypto Assets (MiCA) framework stablecoin issuers will have to maintain significant reserves and face a cap of $200 million in transactions a day. The regulations still have to be ratified and will likely not take effect until at least 2024.
How the SEC threw a wrench in bank regulators’ crypto custody efforts from American Banker – In this country, we are still a long way from a regulatory framework for crypto with case in point being the Staff Accounting Bulletin No. 121 from the SEC. This states that any bank that custodies crypto assets must treat it as a liability on their balance sheet. This makes it very unappealing for banks to hold crypto and there has been considerable pushback.
CCAF fintech study shows potential to address financial exclusion from Fintech Nexus News – The most comprehensive global fintech study ever has been published by the Cambridge Centre of Alternative Finance along with the World Bank and the World Economic Forum. The report contained insights from 1,448 fintech companies across 192 jurisdictions and showed objectively that the pandemic has been good for fintech and for addressing financial inclusion.
NFT giant OpenSea reports major email data breach from TechCrunch – The leader in NFTs, OpenSea, reported a data breach this week although it was not as bad as many we have seen. It seems the data breach only involved email addresses but it is still not a good look for a fledgling industry.
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