by Samuel Mbaki | Jun 9, 2023 | Banking
Key Points
- The Swiss government has reached a pact with UBS over their protection amid the collapsed Credit Suisse bank takeover.
- The pact will come to effect as soon as the takeover is completed.
UBS and Swiss government reach an agreement over Credit Suisse take over
UBS and Swiss government have agreed to protect the investors amid the takeover of the collapsed banking giant Credit Suisse. The two announced on June 9, 2023, that they reached an agreement, which will take effect once the takeover of Credit Suisse is completed.
UBS and Swiss government deal will see the Swiss government cover up to 9 billion Swiss francs ($10B) following UBS’s acquisition of Credit Suisse.
“As part of the agreement, the Swiss government guarantees losses of up to CHF 9bn if realized on a designated portfolio of Credit Suisse non-core assets once UBS bears the first CHF 5bn of any realized losses,” UBS said in a statement.
They went ahead to say that they will manage the assets previously owned by Credit Suisse diligently to minimize losses which maximize value realization on them. Credit Suisse’s acquisition is expected to be completed as early as June 12 per UBS.
Developing story. Keep watching Fintech Express for updates as soon as they happen.
by admin | Jun 9, 2023 | Technology
Key Points
- Palantir CEO Alex Karp claims that tech CEOs are calling for an A.I. pause so they can have time to catch up.
- Karp believes there is an ongoing A.I. race, and every tech CEO wants to grab a top spot.
Palantir CEO calls out tech CEOs for selfishly wanting A.I. to be paused
Karp is opposed to the idea that tech CEOs are genuinely concerned with the after-effects and risks of A.I. He believes that these leaders are calling regulators and governments to stop or pause A.I. products so they can catch up and remain competitive.
His views contrast with the open letter from the Future of Life Institute that has seen signatures from some of the biggest names in the technology industry. The letter has attracted signatures from notable people like Elon Musk, Apple co-founder Steve Wozniak and others who voiced a call for a pause in the release of A.I. research on Artificial Intelligence models larger than GPT-4
The letter also proposes a moratorium where the technology is not paused. An excerpt from it reads.
“if such a pause cannot be enacted quickly, governments should step in and institute a moratorium.”
While speaking in a BBC radio broadcast interview on Thursday, Karp said he believes that “many of the tech CEOs asking for a pause, are asking for a pause because they have no product.”
He added that the tech CEOs who have nothing to offer yet want more time to study Artificial Intelligence and come up with their own products. He added that “studying this and allowing other people to win both on commercial areas and on the battlefield” is a bad strategy.”
When asked if there is an A.I. race going on, Karp stated, “there is already an A.I. arms race, it’s just we’re ahead, [and] it’s not like if we slow down, the A.I. race will stop.” He stated that the most important thing at the moment is not building products for the public like GPT-4 but figuring out how A.I. can be used for military purposes.
He explained that Ukrainians have been using Palantir technologies and A.I. tools to increase the speeds and accuracy of their artillery, giving them an edge over Russian soldiers.
He added that the advent of AI-powered military software on the battle filed “just throws down a gauntlet to every single country in the world, especially [to] our adversaries, they cannot afford for us to have this advantage. And so, the race is on. There’s only a question of do we stay ahead or do we cede the lead.”
Keep watching Fintech Express for more updates on technology and FinTech-related developments.
by Samuel Mbaki | Jun 9, 2023 | Regulation
Key Points
- Binance.US to suspend deposits and withdrawals in USD as banking partners sever ties with them.
- Binance CEO CZ has clarified that Binance.US deposits have never mixed with the funds in the international exchange.
- SEC seeks a restraining order to freeze Binance.US funds to prevent asset flight
Banks are severing ties with Binance.US after SEC charges
More pain for Binance.US customers as banks have decided to move away from the exchange in light of the SEC court battle. They have withdrawn their services of powering the Binance USD fiat ramp, making it impossible to withdraw or deposit USD to the exchange anymore.
Following the developments, Binance.US has announced that it will suspend the deposit and withdrawal of funds from the exchange via USD on June 13, 2023. The exchange is in a court battle with the Securities and Exchange Commission after the regulator filed 13 charges against it on June 5, alleging that it was operating as an unlicensed securities broker.
The SEC is particularly interested in the bank transactions of Binance and Binance.US, where it believes that the exchanges and their founder Changpeng Zhao were violating U.S. securities laws. SEC alleges that Zhao’s influence over the two exchanges has led to the movement of billions between them, attracting their interest. However, Binance CEO, CZ does not accept the allegation clarifying that funds from the two exchanges were never mixed.
The SEC has now filed a motion to grant a restraining order against Binance.US, alleging that the exchange could be used to transfer U.S. customer deposits offshore. While this motion has yet to be granted, the withdrawal of banking institutions from the exchange has led to the immediate need for the closure of the USD fiat ramp as the exchange no longer has a way to serve the demands of its U.S. customers.
However, customer deposits won’t be lost even if they are late in transferring their money. They can still convert it to assets like tether stablecoin and transfer it to other exchanges or crypto wallets. Keep watching Fintech Express for updates on crypto regulation and other Fintech-related stories.
by admin | Jun 8, 2023 | Regulation
Key Points
- FCA has introduced stricter crypto regulations in the U.K. that will take effect in October 2023.
- The new regulations include a “cooling off period” for first-time investors and a ban on “refer a friend bonuses.”
Crypto ads in the U.K to be under stricter regulation-FCA
The U.K. continues to crack down on crypto advertisements as the FCA introduces newer and stricter regulations. The regulator seeks to abolish the refer-a-friend bonus program used for advertising crypto projects, alleging that it hinders the chance for people to decide whether or not they want to be part of a project.
The regulator also introduced a cooling-off period for first-time investors to be implemented in all companies in the U.K. In an official statement, the executive director of consumers and competition at the FCA, Sheldon Mills, said that while the decision to buy or invest in crypto-related investments relies solely on an individual, it can be easily influenced by the kind of marketing done and lead them into making impulsive decisions that would cause regrets.
Mills added that extra guidance is needed to protect crypto investors in the U.K. in such a decision-making process
“The crypto industry needs to prepare now for this significant change. We are working on additional guidance to help them meet our expectations.”
The new rules require crypto companies to verify that individuals possess the necessary knowledge to handle crypto investments. Additionally, to promote these crypto assets, companies must include the associated risks to enhance transparency and ensure that their advertisements are fair, clear and devoid of any misleading information that could result in significant losses.
This news comes when the U.S. is pressing on with crypto regulation as the SEC is charging the two largest crypto exchanges, Binance and Coinbase, over allegations of exposing investors to risky crypto assets. Keep watching Fintech Express for updates on crypto regulation and either Fintech-related developments.
by Fintech Express | Jun 8, 2023 | Regulation, Follow up
Key Points
- Controversy has sparked again regarding SEC’s Gary Gnsler’s motivations behind charging Binance.US as lawyers allege he has a conflict of interest.
- Gary Gensler allegedly was rejected as Binance advisor in 2019, and his recent act of charging the exchange could be motivated by revenge.
- The crypto community continues hitting back at Gary Gensler’s ‘pretentious’ claim to care for investors.
Gary Gensler was rejected as Binance Advisor; Binance lawyers
Per Binance lawyers, Gary Gensler had applied to be an advisor for the exchange in 2019 but was rejected. They allege that the decision by the company to go with another person could have hurt Gensler and motivated him to go after the exchange after he was given power as the Chair of SEC.
Binance Lawyers say that Gensler is having a conflict of interest with the ongoing case as he seems to be motivated more by extorting money from the exchange rather than regulating the crypto industry fairly. They cited that the exchange is always ready to work with regulators and identify any issues that could arise from their services, a step that SEC walked all over before heading to court seeking to settle charges with the exchange.
More controversy over Gary Gensler’s motivations
Binance explains that it’s ready to comply with set regulations, and the regulators are also obligated to make the field level for all participants to foster growth and innovation and not chase it away to offshore nations. Now, SEC is seeking U.S. courts to freeze Binance.US assets, claiming that there are many parallels between Binance and the collapse of the crypto exchange FTX.
However, it has not gone unnoticed that SEC did nothing to prevent the collapse of FTX, like looking into how the exchange operates while it had been committing financial fraud under its nose for years. More controversy comes as Binance lawyers revealed that Gary Gensler was not fit to join SEC as he lied under oath during his testimony in July 2019 for Facebook’s proposed cryptocurrency and wallet.
They said that Gary stated the following words under oath.
“I do not advise any financial, technology, blockchain or other companies, nor do I own any cryptocurrencies.”
Days ago, Gensler said that the U.S. does not need more digital currencies as they are meant to be non-compliant.
“We don’t need more digital currency,” claiming that the crypto business model is “built on non-compliance.”
These comments from Gary Genslers show his interest in smothering cryptocurrencies rather than fostering their regulation and adoption. As such, the crypto community has raised their voices against him, with lawmakers telling him to prepare to appear ahead of Congress to explain why he thinks he has the power to decide for Americans.
Others have called for the crypto industry to pull their efforts together and fight the supposed “Operation Chokepoint 2.0,” which is meant to smother crypto in favour of a more state-controlled CBDC.
Keep watching Fintech Express for updates on SEC’s crypto regulation efforts and other Fintech-related developments.
by Samuel Mbaki | Jun 8, 2023 | Banking
Key Points
- Eurozone records two consecutive quarters of negative GDP growth.
- More pain for Brits as Eurozone starts a recession while inflation rates are high; BoE may continue hiking rates.
- Higher costs of living are expected among Eurozone residents.
Financial crisis bites harder on Brits as Eurozone enters recession amid high inflation rates
Eurozone has plunged into a recession sending negative waves through the market. Brits will have to tighten their belts for tougher economic times ahead. The region has been experiencing one of the highest inflation rates this year among the strongest economies hitting over 10% and sustaining for a long time.
The Bank of England has been working hard to combat the rising inflation rates by raising interest rates. Though this has proved effective, they still need to reach the target 2% inflation rate target for ending 2023. This target seems out of reach as time passes, as the hike in interest rates in an already shaken economy has contributed to reversed economic growth.
Market data shows that Eurozone has had two consecutive quarters of reversed GDP growth. The region’s economy shrank by 0.1% in Q1 2023, a similar growth to the final quarter of 2022. That marks the start of a technical recession. The news comes to an already shaken European Stocks Market that is marked to cuts its profitability by almost 50% by the end of the year.
The one currency zone follows Germany into slipping into a recession though the country is fighting to get out of it. Brits will have to tighten themselves more as experts predict a further shrinking of the GDP. Also, the Bank of England needs to find a way to pause rate hikes to avoid embedding the inflation rates.
Keep watching Fintech Express for updates on Macro finance and other Fintech-related developments.
by Samuel Mbaki | Jun 8, 2023 | Blockchain
Key Points
- Polygon Labs President has testified to the United States House of Representatives Energy and Commerce Committee’s Subcommittee on Innovation, Data, and Commerce on blockchain technology and how its infrastructure could impact the U.S.
- The committee has been listening to regulators and crypto executives testify regarding the potential of the crypto and blockchain industry regarding a bill presented for crypto regulation.
U.S. House Committee records Polygon Labs President remarks on the crypto industry
Polygon Labs President Ryan Wyatt gave his testimony on the crypto industry to the committee on June 7. The meeting was held regarding a crypto regulation bill that has been presented and seeks to harmonize the efforts toward crypto regulation in the country. The Polygon Labs President is one of several crypto executives who are discussing the non-finance-related impacts of blockchain technology with the committee.
The testimonials session comes at a time when the U.S. SEC is going after crypto exchanges and entities hard without the existence of a binding crypto regulatory framework. The regulator has been in the spotlight after charging Binance.US on June 5 and Coinbase the next day.
Coinbase alleges that it had cleared with the SEC before it began operations and tried to register some of its products later on, only for the regulator to severely stonewall its efforts. The regulator is now suing them for not ‘registering’ their securities with them.
However, such happenings may end sooner than later with the new bill in Congress. In his testimony, Wyatt discussed the potential of blockchain technology and its value to users and revamping the internet infrastructure in the United States. He addressed the problem that blockchain technology solves: value extraction on the internet.
Wyatt said that the current Web 2 internet iteration, where companies extract value from the users, will be best left behind as Web 3 allows users to enjoy their value and own their data. He explained how using cryptography and decentralization could solve most internet users’ issues.
He touched on the current regulatory turmoils asking the U.S. lawmakers to do more as the innovation may slip out of their hands. In his words, Waytt said:
“When regulation does not meet novel technology where it is, the U.S. loses its competitive edge over other countries.”
He topped off his argument by explaining how building blockchain ecosystems in the United States of America would benefit economic growth and inclusion. He explained that the transparency that comes with blockchains would streamline productivity and supply chain management, making every dollar count for its value.
Keep watching Fintech Express for updates on crypto regulation and other FinTech-related developments.
by Samuel Mbaki | Jun 7, 2023 | Regulation
Key Points
- The ongoing battles between the SEC and crypto organizations have sent Robinhood back to the drawing board to figure out whether to keep or delist crypto assets seen as securities
- The crypto and stocks trading exchange is seeking to keep its hands clean off of possible scuffles with a hawkish SEC
- The crypto assets that Robinhood is weighing on delisting include SOL, ADA, and Polygon Matic
Robinhood: no trading crypto assets in the US SEC securities list
Robinhood has returned to the drawing board to try and minimize its chances of picking legal fights with the U.S. SEC. The exchange seeks to delist several crypto assets the regulator sees as securities to avoid defending themselves in court and incurring extra costs.
Robinhood wants to do away with Solana, Cardano, and Polygon Matic trading following recent charges that the U.S. SEC has been pressing. The SEC sued Binance.US on May 5, claiming it offered securities to U.S. citizens while not being registered as a securities broker.
A day later, the regulator went after Coinbase alleging that the exchange is also an unregistered securities broker that is putting investors at risk. The regulator has been in this frenzy for quite some time as it spent the better part of last year going after celebrities and big names in the crypto industry for promoting securities via paid promotions and not disclosing that they had been paid.
It also began the year by charging Kraken crypto exchange $30 million in fines and ordering it to close down its crypto staking program in the U.S., alleging that it’s a security that risks the monies of U.S. citizens. As such, it is a message enough that platforms like Robinhood that offer crypto assets trading in the U.S. should be more selective with their products.
In this context, Robinhood has seen it fit to delist some of the tokens highly contested as securities by the exchange until more clarity is available. Keep watching Fintech Express for updates on crypto and other Fintech-related developments.
by Fintech Express | Jun 7, 2023 | Cryptocurrencies
Key Points
- A crypto hack happened against Atomic crypto wallet, with at least $35 million being stolen.
- Experts believe that North Korea could be involved with the hack as they are a major suspect in crypto hacks for a long time
Atomic Wallet falls prey to North Korean hackers?
Atomic Wallet was hacked last week losing upwards of $35 million. Now, North Korea seems to have been caught in another crypto hacking controversy as experts believe that it could be the perpetrator. A report by CNN outlines that the hackers drained crypto assets from the accounts of several customers of Atomic Wallet, an Estonia-based company with 5 million users.
Atomic Wallet reported on Saturday that less than 1% of its monthly users appeared to have been affected by the hack. However, it did not outline the specific amount of money that might have been stolen or who was behind the hack.
This hack was a series of cyber attacks against crypto projects linked to Pyongyang. U.S. officials fear these funds are being used to fund several unregulated projects in North Korea, like the nuclear and ballistic weapons programs.
North Korean hackers have been notoriously terrorizing the crypto industry with billions of dollars most likely to have ended up in their pockets. The recent hack against Atomic Wallet might prove to be one of their ‘paydays’ as Elliptic, a crypto-tracking firm, has uncovered the money laundering techniques and tools that North Korea-linked hackers have been seen to use before.
While no hard proof is found yet to incriminate North Korea or most other hackers, crypto developers can only work to outsmart them and keep funds safer. Keep watching Fintech Express for updates on crypto and other Fintech-related news.
by Samuel Mbaki | Jun 6, 2023 | Regulation
Key Points
- The U.S. SEC has gone after crypto exchange Coinbase, a day after filing one against Binance.US and its founder, Changpeng Zhao.
- The US SEC’s new crypto lawsuit against Coinbase has sent the exchange’s stocks down to 13% at the time of writing.
Coinbase faces a crypto lawsuit from SEC
U.S. SEC has filed a crypto lawsuit against Coinbase Exchange less than a day after suing Binance.U.S. The new lawsuit comes as a climax of the tension that has been there between the regulator and Coinbase for the past several months.
The U.S. SEC had sent a Wells Notice to Coinbase alleging that it had been breaking several rules under its jurisdiction. The notice warned that the regulator could press charges against the exchange if those services continued being offered in the U.S. without its approval.
The tension began when CEO Brian Armstrong hit back, saying that his organization had sought clearance with the SEC before opening for business in the country and was granted permission. Therefore, a crypto lawsuit, later on, could be groundless and ridiculous.
Armstrong said that his team was ready to challenge the SEC in court. Now, the SEC has served the exchange on claims that it acts as an unregistered securities broker in the nation. An excerpt from the lawsuit reads:
“The Coinbase Platform merges three functions that are typically separated in traditional securities markets—those of brokers, exchanges, and clearing agencies. Yet, Coinbase has never registered with the SEC as a broker, national securities exchange, or clearing agency, thus evading the disclosure regime that Congress has established for our securities markets. All the while, Coinbase has earned billions of dollars in revenues by, among other things, collecting transaction fees from investors whom Coinbase has deprived of the disclosures and protections that registration entails and thus exposed to significant risk.”
The SEC continues to say that Coinbase has been
“Operating as: an unregistered broker, including by soliciting potential investors, handling customer funds and assets, and charging transaction-based fees; an unregistered exchange, including by providing a market place that, among other things, brings together orders of multiple buyers and sellers of crypto assets and matches and executes those orders; and an unregistered clearing agency, including by holding its customers’ assets in Coinbase-controlled wallets and settling its customers’ transactions by debiting and crediting the relevant accounts.”
By the time of writing, Coinbase had not replied to the matter and did not reply to a query by Fintech Express regarding the crypto lawsuit on time. Keep watching for updates on regulation and other Fintech-related updates.
