TFU | Jan. 14-20

Leading Off

The DOJ filed charges for an alleged SEC hack which generated $4.1M in profits; HSBC has used distributed ledger technology to settle over $250B in FX transactions; Square has launched a debit card for businesses; SWIFT has published ‘Pay Later’ API standards for instant loans at point of sale; VC funding for cybersecurity firms topped $5B in 2018; the Canadian government has opened a consultation on open banking; and Fiserv is to acquire First Data for $22B.

 

In the News

DOJ files charges for alleged SEC hack. The U.S. Department of Justice (DOJ) filed charges against Oleksandr Ieremenko for allegedly hacking the Securities and Exchange Commission’s (SEC) Edgar database in 2016 and sharing non-public filings with others. The DOJ said the stolen information was used to make over $4.1 million in profit from trades. The SEC is also bringing civil charges against Ieremenko and others.

HSBC used DLT to settle $250B in FX transactions. The global bank used distributed ledger technology to facilitate and settle over three million foreign exchange (FX) transactions last year, “making more than 150,000 payments worth $250 billion,” through its FX Everywhere platform. The bank is now “exploring how this technology could help multinational clients . . . manage foreign exchange flows.”

Square launches debit card for businesses.  The MasterCard-branded card offers sellers real-time access to funds and a 2.75% instant discount on purchases made at other Square sellers. Square recently re-applied for an industrial loan company (ILC) license in Utah, which would allow the company to offer a suite of bank services to customers, including deposit accounts and prepaid cards.

Rubio introduces alternative privacy bill.  Senator Marco Rubio introduced a federal privacy bill that instead of giving the FTC wide new authority, would only permit the agency to write privacy rules if Congress fails to do so. Any rules created as a result of the bill would pre-empt certain state privacy laws. Rubio noted he wants to avoid creating “a regulatory environment that entrenches big tech.”

SWIFT launches ‘Pay Later’ API. The global banking payments network has published new standards to allow banks to instantly approve loans to customers at the point of sale. SWIFT members hope the ‘Pay Later’ standards, which negate the need for multiple implementations between merchants and banks, will help further integrate the banking industry into the digital economy.

U.S. government shutdown halting crypto progress.  Coindesk reports on how the closure of the SEC and CFTC due to the government shutdown has delayed the approval and launch of key cryptocurrency industry products and services. Several startups, including Bakkt and ErisX, have found themselves in limbo and certain products, such as the highly anticipated bitcoin ETF, are now potentially at risk.

VC funding of cybersecurity companies hits record $5.3B in 2018.  According to data from cybersecurity-focused investment firm Strategic Cyber Ventures, cyber firms raised more than $5.3 billion in venture capital globally in 2018, a 20% increase on the $4.4 billion raised in 2017. North America made up the lion’s share with $4 billion in VC funding, driven by “mega” funding rounds in Tanium, Anchorfree, and CrowdStrike.

Privacy activist targets streaming services. Prominent European privacy activist Max Schrems has filed complaints in Austria against multiple streaming services for violations of the GDPR, the new EU privacy law. The complaints accuse companies including Apple, Amazon, Netflix, and Spotify of “structural violations of users’ rights” for which there are potential fines of up to €20 million or 4% of global turnover.

Fiserv plans to acquire First Data for $22B.  The financial services technology provider has struck a $22 billion, all-stock deal to buy payments solutions provider First Data, creating a payments and fintech behemoth. The merger, slated to close in the second half of 2019, is expected to generate at least $500 million in additional revenue and $900 million in cost savings over a five-year period.

Klarna has a new Dogg in the fight.  The Swedish fintech unicorn, valued at $2.5 billion last year, welcomed American rapper Snoop Dogg (a.k.a. Calvin Broadus) as a minority company shareholder and face of its new marketing campaign. Klarna provides payment solutions, including buy-now-pay-later services, for 60 million shoppers across 100,000 retailers in 14 countries.

Coinstar machines to begin offering bitcoin.  The company, which operates coin-counting kiosks in retails spaces around the world, partnered with Coinme, a startup that operates cryptocurrency ATMs in the U.S., to offer bitcoin through its kiosks. “[With Coinme], Coinstar’s flexible platform makes it possible for consumers to easily purchase Bitcoin with cash,” said Coinstar CEO Jim Gaherity.

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