TFU | Oct. 28 – Nov. 3

Leading Off

The SEC delivered a no-action letter to Paxos concerning its blockchain-based stock settlement platform; Uber launched a new division aimed at developing new financial products for its drivers; Telegram is moving forward with its crypto wallet, despite a pending SEC lawsuit; David Marcus talked up Libra at Money20/20; Bakkt is getting into consumer products with a partnership with Starbucks; and former Deputy Comptroller Jo Ann Barefoot launched a new venture aimed at modernizing financial regulation.


In the News

SEC gives Paxos no-action letter.  The U.S. Securities and Exchange Commission (SEC) delivered a no-action letter to Paxos Trust [full text], allowing it to move forward with its proposed blockchain settlement platform. The Paxos Settlement Service will facilitate trades and settlement via blockchain, with Credit Suisse and Societe Generale “among the first broker dealers to use the service,” said Paxos.

Uber shifts into financial services.  The ride-hailing service launched Uber Money, its new in-house team dedicated to developing financial technologies and products to support Uber drivers. Uber will begin by giving drivers access to their in-app Uber Wallet to “more easily track their earnings and spending history,” and future plans include integrating driver debit cards into the driver app.

Telegram tests crypto wallet in face of SEC lawsuit.  The popular messaging app released a desktop-based wallet for its “gram” token, despite a pending action from the Securities and Exchange Commission (SEC). Telegram raised $1.7 billion in a token sale last year, but the SEC charged it with securities violations, saying grams are unregistered securities. The court date is set for February 2020.

Marcus claims Libra can beat competitors on AML.  Speaking at the Money20/20 conference, David Marcus, head of Facebook’s Calibra wallet project, worked to quell concerns about Libra’s security and trustworthiness. “The efficacy of sanction enforcing can be much higher on Libra than other payments networks,” said Marcus, as part of a broader discussion on Libra’s value and potential benefits.

Mastercard publishes principles for data responsibility.  The global payments company has established a “core set of principles guiding the ethical collection, management and use of data.” Due to ongoing consumer trust issues with the use of their data,  Mastercard believes “corporate data responsibility” could become the corporate social responsibility of the 21st Century. 

UniCredit discloses data breach affecting three million customers.  The Italian bank discovered that a file containing the email addresses and telephone numbers of three million domestic customers was breached in 2015. UniCredit said it is notifying affected individuals, but that the information could not be used to access accounts or carry out unauthorized transactions.

EBA urges EU to take action on cross-border financial services.  The European Banking Authority (EBA) is calling on the EU to take action to scale up cross-border banking and payment services in the region. The FinTech Roadmap report identifies clearer guidance and further harmonisation in areas including consumer protection and anti-money laundering rules as necessary improvements.

U.K. FCA warns crypto firms on AML deadline.  The U.K. Financial Conduct Authority (FCA) published guidance for firms that engage in cryptoasset activities under the EU’s new anti-money laundering law (5MLD), in force as of January. The final range of activities in scope of the rules will depend upon the U.K. Treasury’s 5MLD Policy Statement due later this year.

Bakkt to test consumer app with Starbucks in 2020.  The crypto trading platform said it is focusing on developing consumer apps, and will launch such an app with its first partner, Starbucks, in the first half of 2020. Bakkt’s platform, which launched in September, has seen muted trading—despite an uptick in volume, its physically-settled bitcoins future contract lags the CME’s cash-settled product.

Financial industry vets form regtech alliance.  Former Deputy Comptroller of the Currency Jo Ann Barefoot and David Ehrich, co-founder of fintech credit card startup Petal, launched The Alliance for Innovative Regulation (AIR), a new effort to connect regulators and entrepreneurs and help modernize financial regulation. AIR has already raised $2 million in funding from fintechs and VCs. 





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