The ICBA protested Square’s ILC application and called for a moratorium on all ILC applications; SoFi announced that it has withdrawn its ILC application; SWIFT and several bank partners conducted a successful DLT proof-of-concept test; Hyatt announced it experienced a data breach that exposed the payment information of customers at 41 hotels; China’s government is pressuring large tech firms to give it a larger role in corporate operations; and Russia will issue an official digital currency.
In the News
The ICBA protests Square’s ILC application… The Independent Community Bankers of America (ICBA) called on the FDIC to deny Square’s Industrial Loan Company (ILC) application and “impose a moratorium on new ILC applications.” As with SoFi’s application, the ICBA letter [full text] argues that an ILC charter would allow Square to avoid certain Bank Holding Company Act prohibitions.
…and SoFi withdraws its ILC application… The online lender withdrew its application to become an ILC in the wake of several executive departures and ongoing fallout from allegations of sexual harassment levied at former CEO Mike Cagney. “With SoFi’s leadership in transition, we’re withdrawing our application . . . for now,” said a SoFi spokesperson.
SWIFT conducts successful blockchain PoC. The financial messaging service said [full report] that its recent blockchain proof-of-concept (PoC) demonstrated DLT’s ability to “deliver the business functionalities and data richness required to support real-time liquidity monitoring and reconciliation.” SWIFT partnered with six banks on the test, which used Hyperledger Fabric v1.0.
Coinbase allows for instant purchases. The cryptocurrency exchange announced that users can now “instantly purchase cryptocurrency and have it be funded from a U.S. bank account,” eliminating the 3-5 day waiting period it took for “funds to transfer via ACH before [crediting a] purchase.” The delay had frustrated users due to bitcoin’s significant, daily price volatility.
Cryptocurrency mining malware is on the rise. A report in the MIT Technology Review discusses the proliferation of malware that hijacks enterprise servers for cryptocurrency mining operations. Research suggests that “mining attacks aimed at enterprise networks jumped sixfold between January and August,” which “could generate up to $30,000 a month” for hackers.
Hyatt suffered a payments system data breach. Hyatt completed a review of a data breach originally discovered in July that exposed customers’ “credit card data from 41 hotels in 11 countries.” The hack may affect customers who used credit cards at these hotels between March 18 and July 2, 2017.
China’s extremely visible hand. The Chinese government reportedly wants the country’s largest tech firms, including fintech mega-firms like Ant Financial and Tencent, “to offer the state a stake in them and a direct role in corporate decisions.” China has recently increased its regulatory oversight over fintech firms, and notably banned ICOs and cryptocurrency exchanges last month.
Russia to adopt official digital currency. Russia announced that it will begin issuing a DLT-based digital currency, the “CryptoRuble.” Russia has taken a “hard line on other coins, calling them illegitimate replacements for the official currency,” and CryptoRubles will be “issued and tracked by the government like ordinary currency,” despite using blockchain as the medium of exchange.