TFU | Mar. 25-31

Leading Off

The U.S. SEC delayed making a decision on two bitcoin ETFs; FICO and Equifax announced they plan to sell customer data to banks; a new report indicates that the majority of crypto exchanges lack appropriate KYC and AML controls; Apple announced it will introduce a new credit card in partnership with Goldman Sachs and Mastercard; and Hong Kong’s securities regulator announced new guidance on crypto token offerings.


In the News

SEC delays decisions on two bitcoin ETFs.  The U.S. Securities and Exchange Commission (SEC) will delay making a decision on two bitcoin exchange-traded fund (ETF) proposals submitted earlier this year by Bitwise Asset Management and VanEck/SolidX. The SEC typically has 240 days to approve or reject any ETF proposal, but the postponement will give the agency an additional 45 days.

ULC urges states to wait to enact crypto rules.  The Uniform Law Commission (ULC) encouraged states “considering its proposed model act regarding virtual currencies to refrain from enacting it” until the body has further studied the impact of emerging technologies on the Uniform Commercial Code. The ULC’s statement may impact proposed bills in California, Hawaii, and Oklahoma, among others.

FICO and Equifax plan to sell consumer data to banks.  The consumer-credit giants will work together to sell data to banks to satisfy their appetite for customer information. The partnership is an effort to diversify beyond credit score reports, but the firms will face competition from data providers and fintech firms, as well as customer banks’ own analytics departments.

U.S. banks join KY3P network.  Twelve regional U.S. banks joined KY3P, a cloud-based data hub for assessing and monitoring third-party vendor risk managed by IHS Markit with the support of Barclays, Goldman Sachs, HSBC, Morgan Stanley and UBS. The joining banks include Ally Bank, BBVA Compass, Santander US, and SunTrust Bank. KY3P is a direct competitor of TruSight.

Much of the crypto industry lacks proper KYC procedures.  According to a global study of 216 crypto exchanges, 69% lack “complete and transparent” know your customer (KYC) procedures and only 26% have a “high” level of AML procedures. Several exchanges (e.g., Coinbase, Gemini, and Circle’s Poloniex) were identified as “low risk” due to their compliance programs and regulatory licenses.

Apple introduces credit card.  The tech giant unveiled the Apple Card, a physical credit card it will offer in partnership with Goldman Sachs, which will sync with users’ ApplePay accounts. The card will run on Mastercard’s network and will be fee-free. Apple has said that user spending data will be stored on users’ iPhones, not Apple servers, and will not be shared with third-party advertisers.

Multiple cities to support Apple Pay in transit systems.  Apple announced that transit systems in New York City, Chicago, and Portland will begin accepting payments through Apple Pay later this year. The cities add to Apple’s growing portfolio of global city transit systems, including London, Beijing, and Shanghai.


Mastercard publishes digital identity principles.  A report [link] from the global payments company sets out ten guiding principles for its digital identity offering, focusing on control, inclusivity, transparency, and confidentiality. Mastercard describes its approach as amounting to a fundamental individual right: “I own my identity and I control my identity data.”


Hong Kong SFC issues guidance on token offerings.  The Hong Kong Securities and Futures Commission (SFC) issued a statement to intermediaries and investors working with security token offerings. The SFC noted a number of requirements and best practices, including having proper licenses, conducting proper due diligence reviews, and selling only to professional investors.

Grab considers spinning off financial arm.  The Southeast Asia-based ride-hailing firm, valued at $16 billion, is in discussions with Ant Financial and PayPal about potentially spinning off its Grab Financial Group financial services unit. Grab is focusing more on financial services as it “seeks to become the ‘everyday app’ for consumers in Southeast Asia, where digital spending is expected to triple by 2025.”

Mastercard plans $300M investment in Network International.  Mastercard confirmed it plans to make a $300 million investment in Network International, a Middle Eastern payments processor. In their partnership, Network International and Mastercard “intend to establish shared development projects and cross-referral arrangements for products and services to financial institutions.”


Does history suggest Bitcoin will not rebound?  The Economist compares Bitcoin’s boom and bust cycle to past financial manias, including the dotcom bubble, highlighting the flaws in the digital currency’s market and valuation. Per the article, Bitcoin’s decline exposed three significant problems with Bitcoin: over-exaggerated activity, challenges with scalability, and endemic fraud.


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