TFU | Nov. 5-11

Leading Off

The SEC plans to release “plain English” guidance on ICOs; American Express became the first foreign card provider to be approved to enter the Chinese card market; Credit Karma acquired Noddle and entered the U.K. market; HSBC disclosed a data breach affecting some of its U.S. retail customers; and Vox profiled Initiative Q, a new cryptocurrency and payments network.

In the News

SEC to release “plain English” ICO guidance.  U.S. Securities and Exchange Commission (SEC) director William Hinman said the agency will issue new guidance for firms seeking clarity on when initial coin offerings (ICOs) will be treated as securities offerings. “We’ll elaborate on [ICOs] in a very plain English way, so . . . you should be able to sort things out,” Hinman told developers during D.C. Fintech Week.

American Express to enter Chinese payments market.  AmEx became the first foreign card provider to win direct access to China’s card market after obtaining approval for a clearing and settlement license from China’s central bank. The move comes after almost a decade of lobbying by U.S. card companies. Mastercard and Visa hope to follow suit, submitting their own license applications.

U.S. community banks form fintech alliance.  Twelve U.S. community banks teamed up to create the Alloy Labs Alliance to explore new technologies and fintech opportunities. Innovation firm Fintech Forge will manage the alliance and consultancy Crowe will provide regulatory and compliance support. Founding members include CenterState Bank, Citizens & Northern Bank and Columbia Bank.

Credit Karma expands into U.K. with Noddle acquisition.  The U.S. credit report and financial services advice provider purchased Noddle, a U.K.-based “credit reporting service with 4 million users,” from TransUnion. The terms of the deal were not announced by the acquisition gives Credit Karma its first foothold in a country outside of the United States and Canada.

Bitcoin volatility drops despite market turmoil.  Cryptocurrency volatility has dropped as turmoil has gripped traditional financial assets, bringing 30-day volatility for most crypto assets in line with the S&P 500. Some investors attribute reduced volatility to speculators feeling the market, while Morgan Stanley suggests investors are waiting on greater adoption.

Colorado regulators continue crack down on ICOs. Last week, Colorado’s ICO Task Force issued cease-and-desist against four initial coin offerings: Bitcoin Investments, Ltd, PinkDate, Prisma and Clear Shop Vision Ltd. The Task Force, established in May 2018 by Colorado’s Division of Securities, has taken action against 12 crypto startups to date citing fraud and theft concerns.

HSBC’s U.S. customers affected by data breach.  The London-based global bank said hackers breached its U.S. retail business in early October, compromising customer account details, statement histories and other personal data. Less than 1% of its 1.4 million U.S. customers were affected.

SoFi loses money for second straight quarter.  The online lender recorded a loss of $12 million in Q3, following a $150 million loss in Q2, in part due to rising interest rates on the cash it borrows to offer loan refinancing to its customers. Under new CEO Anthony Noto, “[SoFi’s] loan volume has fallen for two straight quarters . . . [in] a tougher environment for consumer lending.”

Canada’s data agency faces blowback over bank record collection. Statistics Canada is facing scrutiny from lawmakers and privacy advocates over a plan to access the banking records of 500,000 randomly selected households in order to improve its understanding of consumer spending patterns, given low voluntary response rates to its surveys.

Zopa raises £60M ahead of bank launch.  The British peer-to-peer (P2P) lender raised £60 million from new and existing investors to launch a banking arm that will allow it to accept deposits, after having applied for an FCA bank license in 2016. The move will put Zopa into competition with the U.K.’s four largest retail banks as well as other P2P lenders like Funding Circle and RateSetter.

Vox profiles Initiative Q. Vox explores the new cryptocurrency network, founded by former PayPal employee Saar Wilf, which some analysts have called a “Ponzi scheme.” Initiative Q currently offers free, invitation-only access to the network, which it hopes will drive up rapid adoption and increase the value of the project’s token. So far, over two million people have signed up.

When block-heads become space cadets.  Blockchain firm ConsenSys announced it would acquire space startup Planetary Resources, which has been developing a system for landing on and mining asteroids. Details about how the firms will work together are unclear, though ConsenSys founder Joe Lubin said the purchase will support “decentralizing space endeavors.” Because, sure.






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