The Fintech Update, 9/25 - 10/1
Hi! It’s Monday, October 2nd, 2023.
The Rundown
Chase is banning crypto transactions for UK customers starting October 16th, citing high rates of fraud and scams. We’re not surprised by the announcement, given UK banks’ history with crypto: NatWest, Santander, and HSBC have all curbed or banned UK clients’ access to crypto within the last year. Last month, the UK Financial Conduct Authority called for dialogue between banks and crypto firms to address the “de-banking” of the sector. Brian Armstrong, CEO of Coinbase, also publicly criticized recent attempts to “deplatform this whole industry” following the Chase news. Our take? In the absence of further regulatory action, UK lenders are unlikely to change their tune. The collapse of Signature Bank and Silvergate Bank earlier this year has motivated lenders to curtail their exposure to the sector. This has sparked a vicious cycle: as more banks deny customers access to crypto, the greater the sector concentration becomes for the remaining banks.
Apple is “soft launching” a feature that enables real-time connectivity to supporting bank accounts via the United Kingdom’s Open Banking API. The offering will allow Apple cardholders with a connected bank account to view their balances and payment history directly in the Wallet app. It’s unclear whether Apple will launch a similar offering in the US – while the UK Open Banking Standard creates uniformity in how banking data is shared between parties, the US landscape isn’t quite as straightforward.
The OCC named Donna Murphy, an agency insider, the new chief of the recently-established Office of Fintech Innovation. Murphy, who has been leading the office in an interim capacity since September, replaces Prashant Bhardwaj. A somewhat mysterious figure, Bhardwaj has no online presence despite the agency claiming he brought “30 years of experience serving in a variety of roles across the financial sector” when the office was originally announced. The regulator did not comment on his exit.
Singaporean authorities arrested Su Zhu, co-founder of the bankrupt digital hedge fund Three Arrows Capital, as he tried to flee the country. Zhu and his co-founder Kyle Davies have been sentenced to four months in prison related to the collapse of the hedge fund, which had some $10B in assets prior to its demise, leaving it unable to repay lenders. Davies remains at large.
The Reading Nook
The Wall Street Journal explores why crypto exchange Binance is coming on tough times (spoiler: mass layoffs, management turnover, and regulatory attacks).
Mercedes and Mastercard are launching revolutionary technology that allows customers to pay for gas from behind the wheel. Unfortunately they still need to get out of the car to fuel it.
Selected fundings
Market intelligence platform Alphasense raised a $150 million Series E funding round led by BOND less than six months after it announced a Series D extension. The latest financing brings Alphasense’s valuation to $2.5 billion.
Wealth management platform Farther raised $31 million in a Series B funding round led by Lightspeed.
B2B payments platform for enterprise companies Slope raised $30 million in a new funding round led by Union Square Ventures with participation from Sam Altman.
Series, a company developing software to centralize and automate businesses’ finance and operations stacks, announced that it has raised $25 million across seed and Series A rounds.
African payment orchestration provider Revio raised $5.2 million in a seed funding round led by QED.