TFU | Jan. 21-27

Leading Off

Kik is expected to challenge the SEC over an ICO enforcement action; Coinbase rolled out crypto institutional services in Asia; Alipay was granted an EU e-money license; Bitcoin ATM startups reported growth; the EU and Japan finalized a data flow agreement; and IBM landed a $260m IT infrastructure deal with the Bank of the Philippine Islands.


In the News

Kik expected to challenge SEC over ICO enforcement action.  According to the Wall Street Journal, the Canadian messaging app plans to “fight an expected enforcement action from the Securities and Exchange Commission [SEC] over a 2017 initial coin offering [ICO].” The SEC is alleging that Kik’s $100 million ICO was an unregistered security sale; while Kik argues that its “kin” token represents an asset class different from a traditional security.

NYDFS grants two BitLicenses.  The New York regulator announced on Thursday that it approved Robinhood Crypto and LibertyX’s applications for virtual currency licenses. Robinhood can now offer services for buying, selling, and storing virtual currencies, while LibertyX will become the first licensee to allow customers to use debit cards to purchase Bitcoin from traditional ATMs. To date, DFS has approved 16 such licenses.

FCA consults on crypto regulation.  The consultation [link] by the U.K.’s financial regulator aims to help market participants understand whether crypto assets fall within the scope of existing regulations, including the possible application of the U.K.’s Regulated Activities Order, or the EU’s MiFID II, e-money or payments services rules to these assets. The consultation runs until April 5, 2019.

Coinbase announces crypto institutional services for Asia.  The digital currency exchange has begun rolling out its custodial services, open to U.S. clients since May, across Asia. Coinbase’s head of institutional sales for Asia, Kayvon Pirestani, says that the region will be a key part of the company’s growth going forward, and noted that Asia is already home to one of the company’s “top-five clients”.

Alipay granted EU e-money license.  The payments arm of China’s Ant Financial established a new, Luxembourg-based entity called Alipay (Europe) Limited S.A., which was granted a license to operate as a e-money firm throughout the EU. Alipay already had an e-money license from the U.K., so this is an apparent hedge against the threat of the U.K.’s potential “no-deal” exit from the EU.

Samsung’s Galaxy S10 may come with a cryptocurrency wallet.  Recently leaked photos of theSamsung Galaxy S10, scheduled for release on February 20, show a new feature called the “Samsung Blockchain KeyStore.” The feature allegedly allows users to import an existing cryptocurrency wallet or create a new one, and is rumored to support Bitcoin, Bitcoin Cash, and Ethereum-based ERC20 tokens.

Millions of bank loan and mortgage documents leaked online.  TechCrunch reports that a trove of more than 24 million financial and banking documents, containing highly sensitive financial and tax documents, were leaked online after a server security lapse. The leak has been traced to Ascension, a data and analytics company for the financial industry, and one of its third-party vendors, OpticsML.

MasterCard takes on Visa to acquire Earthport.  MasterCard has opened up a potential bidding war with rival Visa over the acquisition of cross-border payment firm Earthport, posting a £233 million cash offer for the U.K. firm following Visa’s offer of £198 million. The move follows a difficult 2018 for Earthport with reduced transaction volumes and mid-year operating losses of £8.4 million.

EU and Japan launch data flow agreement.  The EU and Japan finalized an agreement to allow the transfer of personal data between the jurisdictions without additional safeguards, creating “the world’s largest area of safe data flows.” The decision accompanies the EU-Japan Economic Partnership Agreement, which is to become the world’s biggest trade deal when it takes effect next month.

IBM lands $260M deal with the Bank of the Philippine Islands.  IBM reached a $260 million, multi-year services agreement to boost the Philippine bank’s digital transformation by providing IT infrastructure and hybrid cloud management services to support online, mobile, ATM, and branch services. The deal is similar to recent IBM long-term service contracts with BNP Paribas and Nordea.

Barclays invests in expanding Rise New York.  The British bank announced a “significant expansion” of its Rise incubator in New York, one several “co-working, mentoring and events space[s] in its Rise FinTech ecosystem.” The investment will increase the space to five floors of office space totaling over 66,000 sq. ft., capable of accommodating over 200 businesses.

Goldman invests £45M in Nutmeg.  The investment bank co-led a £45 million funding round in the London-based digital wealth management startup. The five-year-old firm has grown into the eighth-largest wealth manager in the U.K. and plans to use to funding to expand its reach to new customers and new markets.

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