TFU | Sept. 17-23

Leading Off

The New York AG reported three cryptocurrency exchanges to the NYDFS; U.K. banks were hit with widespread outages; PNC joined Ripple’s distributed ledger network to process international payments; California prepared the first legislation in the U.S. to govern IoT security; the U.K. parliament published a report calling for regulation of crypto assets; and Fannie Mae’s general counsel joined Coinbase.


In the News

New York AG reports crypto exchanges to DFS.  New York Attorney General Barbara Underwood reported Binance, Kraken, and to the Department of Financial Services (DFS) for “possible violations of digital currency [laws].” Underwood noted “abusive trading practices” and lack of “‘serious efforts’ to restrict or monitor manipulative trading” among her concerns.

U.K. banks face widespread outages.  Many of the U.K.’s leading high street banks have recently been hit with online banking glitches. In the past week, customers of Barclays, Natwest, and RBS have all reported being unable to access their online banking services. The banks have not yet provided explanations for the outages, leading to questions about the state of resilience in the industry.

Goldman to sell its fixed income app.  The investment bank is selling Simon, which helps banks sell complex fixed income instruments to retail brokers with a focus on structured notes. The sale of the online tool, valued at $100 million, is only the most recent example of Goldman spinning off its internal technology. JPMorgan, HSBC, and other large banks have been listed as potential buyers.

Deploying AI to stop cyberattacks.  The Wall Street Journal discusses corporations’ increasing use of AI tools to “fight off hackers and contain data breaches . . . using machine learning to [analyze] malware files, searching for common characteristics that will help them identify new attacks.”  AI is not a “silver bullet,” says IBM Security CTO Koos Lodewijkx, but is a “new tool in our toolbox.”

Japanese crypto exchange hacked for $60M.  Operators of Japan’s Zaif exchange revealed that hackers stole $60 million worth of customers’ assets, consisting of nearly 6,000 bitcoins and other currencies. The breach is “another black mark for Japan’s Financial Services Agency . . . [as it] was one of seven exchanges sanctioned for its security measures in the wake of [last year’s] Coincheck hack.”

PNC to partner with Ripple.  PNC has joined Ripple’s distributed-ledger-based network, RippleNet, to process international payments, alongside other large financial institutions like Bank of America, American Express, Banco Santander, and Credit Agricole. PNC will go live with the service in Q4 2018.


California prepares IoT security bill.  The bill, currently with Gov. Jerry Brown (D) for signature, sets baseline cybersecurity standards for internet-connected devices, requiring manufacturers to include security features, although some experts have criticised the bill’s language as too broad to be effective. If passed, it would become the first legislation in the U.S. to govern security for the Internet of Things.



Companies are scrambling to meet data breach reporting requirements.  Multinational corporations are taking steps to more quickly detect and report data breaches to avoid steep GDPR penalties. The regulation requires firms collecting data on EU citizens to report breaches within 72 hours of discovery. A survey found that 72% of companies are not highly confident in their ability to comply with the rules.


U.K. parliament report backs crypto asset regulation.  The Treasury Select Committee report calls for anti-money-laundering regulations and consumer protection rules for crypto assets to address what it calls a “wild west” situation. It also views cryptocurrencies as speculative assets rather than currencies. Nevertheless, the report does not rule out the U.K. becoming a global financial center for the industry.

Abu Dhabi launches “digital sandbox.”  The emirate’s new sandbox initiative will “offer banks, fintechs and regulators an open digital marketplace in which to collaborate on . . . new products.” Abu Dhabi hopes its new approach will promote local fintech and attract new international investment, as it competes with Dubai and Saudi Arabia to be the “fintech hub of choice in the Middle East.”


Fannie Mae GC joins Coinbase.  Fannie Mae’s general counsel, Brian Brooks, is leaving the mortgage giant to head the legal team at the digital currency exchange. “[Brian’s] arrival is part of our effort to expand our legal, compliance and government affairs capabilities as we head into this next chapter for the company and the cryptocurrency industry as a whole,” said Coinbase’s CEO, Brian Armstrong.


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