Fintech Update, 2/7 - 2/13

Feb 14, 2022

Hi! It’s Monday, February 14, 2022.

The Department of Justice made its largest financial seizure in history, recovering $3.6 billion in Bitcoin from a couple accused of laundering the cryptocurrency for five years following a 2016 hack of the Bitfinex exchange. Although it is unknown whether the couple – husband Ilya Lichtenstein, 34, and wife Heather Morgan, 31 – participated in the 2016 hack, the Justice Department alleges that they “conspired to launder the proceeds of 119,754 bitcoin that were stolen from Bitfinex’s platform . . . and initiated more than 2,000 unauthorized transactions . . . to a digital wallet under Lichtenstein’s control.” The arrests “show that cryptocurrency is not a safe haven for criminals,” said deputy attorney general Lisa O. Monaco.

Crypto exchange Binance, founded just under five years ago by CEO Changpeng “CZ” Zhou, whose personal fortune is valued at $96 billion, invested $200 million in 104-year-old finance magazine Forbes, immediately becoming one of the publisher’s two largest single shareholders. The Binance funds will support Forbes’ plan to go public via SPAC later this quarter, and the company will also get two seats on Forbes’ nine-seat Board of Directors.

India jumped on the CBDC bandwagon, announcing plans to launch a digital rupee and tax crypto profits. The announcement appears to be somewhat of a reversal for a country that recently considered banning crypto, although the proposed 30% tax on crypto profits signals that the Indian government’s approach to crypto mirrors that of China’s, discouraging non-governmental cryptocurrencies (although China has gone further by banned them altogether) and encouraging the use of a centrally regulated digital token.

Apple announced that it will roll out “Tap to Pay” to iPhones, effectively turning iPhones into point of sale terminals that allow people to buy goods from merchants by tapping their phones together. Stripe will be the first payment service to support Apple’s Tap to Pay, which also will be fully integrated into Shopify’s point-of-sale product.

American Express is launching a digital-only consumer checking account for the first time, in a bid to compete with a wave of neobank offerings. The checking account will have no fees, 0.5% APY, and comes with a debit card offering one point per $2 in eligible spend.

Payments and financial services platform Fiserv agreed to acquire cloud-native banking solution Finxact for $650 million (the purchase price is actually about $800 million, but Fiserv already owns a piece of the company.) Finxact will support Fiserv’s digital banking strategy by expanding their account processing, digital, and payments solutions.

Meta announced that Facebook Messenger is rolling out its Split Payments functionality to all US iOS and Android users. Similar to Splitwise, the functionality will allow users within a group chat to split a bill, confirm payment details, and send requests for money to friends.

SMB credit platform Tillful launched the Tillful Card to increase access to credit and growth capital for SMBs. Tillful is offering the card via partnership with card issuing as a service provider Highnote and Mastercard.

Identity verification platform Trulioo acquired no-code orchestration solution HelloFlow for an undisclosed amount. The acquisition “accelerates the delivery of an enhanced end-to-end identity platform by combining Trulioo’s . . . data and identity services network . . . with a full suite of orchestration, onboarding workflow and risk management capabilities.”

Doordash, via partnership with Parafin, is launching DoorDash Capital, a lending service for restaurants that will provide eligible customers with pre-approved financing in their Doordash accounts – with repayment based on a percentage of Doordash sales.

DriveWealth, a startup that helps firms like Revolut offer stock trading, is getting into crypto trading. CEO Bob Cortwright sees Coinbase’s “unsustainable” trading fees as an opportunity, and thinks that increased retail participation in crypto will drive down transaction costs.

BlackRock, the world’s largest asset manager, is planning to offer crypto trading to its institutional clients through its “Alladin” investment management platform.

Berlin-based financial super-app Vivid Money raised $114 million in Series C funding at an $886 million valuation.
Payments provider GoCardless raised $312 million in Series G funding at a $2.1 billion valuation.
Vietnamese retail investment app Infina raised $6 million in seed funding.
French BNPL provider Alma raised $130 million in Series C funding.
Fraud-as-a-service provider Sardine raised $19.5 million in a Series A funding round with participation from a16z, NYCA, and Experian Ventures.
Klarna reportedly is working on a new funding round that would value the company between $50–$60 billion, up from its funding round last June at a $45.6 billion valuation