by Samuel Mbaki | Jun 12, 2023 | Banking
Key Points
- UBS completes take over of Credit Suisse days after signing a loss protection agreement with the Swiss government
- The bank is set to have an enlarged balance sheet of $1.6T and a workforce of over 120K
UBS becomes the new owner of Credit Suisse and its assets
UBS, a Swiss banking giant, has completed the takeover of Credit Suisse following its collapse in March 2023. The bank will now be in charge of a balance sheet worth over $1.6T and a workforce of around 120K professionals.
The news comes days after Fintech Express reported that the bank had completed a deal with the Swiss government for loss protection. On June 12, 2023, the bank said it had completed the deal and looked forward to the next chapter in its business journey and history.
“Instead of competing, we’ll now unite as we embark on the next chapter of our joint journey,” UBS Group’s new CEO Sergio Ermotti said in a statement.
UBS group is set to manage the two banks as separate entities in the short term while assessing options for the future of Credit Suisse’s assets for the future. In an open letter, Credit Suisse chiefs said they would not also want to compromise the string work culture at UBS or its conservative risk approach.
The Swiss banking giant said that it expects the operating losses and significant restructural changes at Credit Suisse to be offset as it seeks to ditch risk-weighted assets. It added that it foresees a common equity tier 1 capital ratio of around 14% for the remaining part of the year.
Keep watching Fintech Express for more updates on Banking and other fintech-related news and developments.
by Samuel Mbaki | Jun 12, 2023 | Blockchain
Key Points
- Ethereum co-founder and core developer Vitalik Buterin has stated layer 2 scaling, wallet security, and privacy-preserving features as the three key features to support Ethereum’s future.
- He added that a misfit in either one of the three features could spell doom on the network.
- Vitalik Buterin also asked developers to keep building.
Ethereum fails without these three pivots: Vitalik Buterin
Vitalik Buterin, Ethereum network co-founder and core developer, has outlined wallet security, layer 2 scaling, and privacy-preserving features as key Ethereum pivots. In a June 9, 2023 post from his blog, Vitalik Buterin expressed that the Ethereum network outright “fails” without either of the features.
He started with scaling issues, saying that layer 2 scaling keeps the network uncongested, highly competitive, and affordable. He said that without l2 protocols, the fees would be exorbitantly high, leading to a collapse in the ecosystem due to unaffordability and low transaction speeds.
An excerpt in the blog post reads.
“Ethereum fails because each transaction costs $3.75 ($82.48 if we have another bull run), and every product aiming for the mass market inevitably forgets about the chain and adopts centralized workarounds for everything.”
On smart contract wallets, Vitalik Buterin said that a move to institute them in the network has resulted in some issues due to complexities from user experience as users take control of multiple addresses all at once. He expounded that these wallets must secure data to truly transition into an on-chain world with zero-knowledge rollups:
“In a ZK world, however, this is no longer true: the wallet is not just protecting authentication credentials, it’s also holding your data.”
The last of his three pivots of the Ethereum blockchain came in the form of privacy-preserving features. Vitalik said these features must bring improved identity, reputation, and social recovery systems for users to experience improved security.
An excerpt from his blog reads:
“Without the third, Ethereum fails because having all transactions (and POAPs, etc) available publicly for literally anyone to see is far too high a privacy sacrifice for many users, and everyone moves onto centralized solutions that at least somewhat hide your data.”
He suggested the use f stealth addresses for the issue. Vitalik Buterin has expressed that getting all three pivots of the blockchain up and running will be challenging as “intense coordination” is required between them.
He added that realizing this goal is still afar as it would be tiresome to acquire information on how to pay someone, unlike using one address model. As such, he concluded the need for developers to keep working and figure out how to develop an infrastructure that ultimately improves user experience.
Keep watching Fintech Express for more updates on crypto and fintech-related developments.
by Samuel Mbaki | Jun 12, 2023 | Blockchain
Key Points
- Sturdy Finance, a popular DeFi lending protocol, has been compromised by crypto attackers.
- The attackers made away with around $800K
Crypto hackers strike again; Sturdy Finance affected
Sturdy Finance, a well-known Decentralized Finance lending protocol, has fallen prey to hackers that managed to drain $800K. The platform has responded by saying that it has paused all markets and no further funds were at risk.
The attackers managed to drain 442 Ethereum, worth around $800K at the time of writing, after discovering a security loophole in its systems and exploiting it. They took advantage of the vulnerability that allowed them to manipulate a faulty price Oracle hence draining funds from the protocol.
The event was first noticed by onchain security firm PeckShield alert that went ahead to alert Sturdy Finance. Peckshield noticed anomalies within the transactions being made in the platform as they knew that Sturdy Finance had to be compromised as the transactions showed price manipulation signs.
About an hour later, Sturdy Finance said that they had been aware of the vulnerability and were working on it first by pausing all markets to hinder the continued outflow of further resources to the attacker’s loot.
Despite the efforts, the attacker had already transferred the monies to the Tornado Cash crypto mixer, making it harder to continue tracking it. This attack against Sturdy Finance comes when the crypto space sees increased cyber attacks. Recently, BitBoy, a popular crypto influencer, had his Twitter account hacked to promote scam projects.
Crypto detective Zach XBT says that scammers have made away with almost a million dollars by taking control of social media accounts belonging to popular individuals like Pudgy Penguins, Peter Schiff, Steve Aoki, and many others. As such, crypto investors should be more careful when dealing with the industry to protect themselves from such events.
Keep watching Fintech Express for updates on crypto and other fintech-related stories and developments.
by Samuel Mbaki | Jun 9, 2023 | Regulation
Key Points
- SEC chairman has explained that the regulator had a meeting earlier this week where they discussed and introduced two more rules for Swap Markets
- He also says that the regulator has adopted a set of final rules to remove references to credit ratings from Rules 101 AND 102 of Reg M per a mandate by Congress in the wake of the 08 financial shakedown.
Swap markets need more attention, says SEC chair
SEC chair Gary Gensler has announced the introduction of more rules for Swap Markets. He says investors need more protection as misconduct in such markets could affect many involved parties.
In a Twitter post, Gary Gensler says that the regulator saw it fit in their latest meeting to introduce two more rules in the Swap markets. In his words, Gnsler said:
“Any misconduct in the security-based swaps market noit only harms direct counterparties but also can affect reference entities and investors in those reference entities. Given these markets size, scale and importance, it is critical that the commission protect investors and market integrity through helping prevent fraud, manipulation, and deception relating to security-based swaps. Today’s rules will do just that.”
He added that they also adopted a set of final rules to remove references to credit ratings from Rules 101 & 102 of Reg M, fulfilling an important mandate issued by Congress in the wake of the ’08 financial crisis.
Keep watching Fintech Express for updates on financial regulation and other fintech-related developments.
by Samuel Mbaki | Jun 9, 2023 | Regulation
Key Points
- Mica has been published in the E.U. official journal.
- The crypto legislature will take effect by the end of 2024 to create a unified crypto assets regulation in the European Union Member States.
MiCA crypto regulations added to E.U. official journal- the countdown to effect starts.
E.U. has published MiCA regulations in its official journal, kickstarting the countdown to them taking effect by the end of 2024. These regulations have been in development over the past few years. They will play a big part in harmonizing crypto regulations in the region, as all European Union member states will be using them.
The European Union Markets in Crypto Assets (E.U. MiCA) legislation was published on June 9, 2023, triggering the count down to December 30, 2024, where it should be effected. This bill was signed into law on May 31. Still, it has been agreed upon by the E.U. lawmakers to give the crypto industry time to read and digest them before they are effected to avoid bringing hasty regulation that may send innovation away from E.U. member states.
The crypto industry has hailed the E.U. for introducing the proper regulatory framework in the area, unlike the U.S., which charges exchanges without having put in similar efforts first.
Today, Binance’s CEO praised the European Union for the legislation and said that since there is a new framework in Europe, his exchange and others will have time to adequately adjust and adhere to it to serve both the law and the investors.
In the meantime, crypto organizations are getting under fire in the U.S. as SEC is going hard after them. By now, Bittrex and Kraken have been charged with ongoing court proceedings for Ripple, Coinbase, and Binance. These organizations are being sued for offering securities assets to U.S. citizens without the ‘knowledge’ of the SEC.
Keep watching Fintech Express for updates on crypto regulation and other Fintech-related developments.
