The FTX fallout continues to lead the news as founder Sam Bankman-Fried, going against his lawyer’s advice, spoke publicly for the first time since the blowup last month. We also had news from the CEO of BlackRock, BlockFi files for bankruptcy, strange things are happening at Pipe, and there is a new blockchain system for banks. Here are what I consider to be the top ten fintech news stories of the past week.
Sam Bankman-Fried said he didn’t know about Alameda’s exposure from Fintech Nexus – The most talked about interview in fintech this week was Sam Bankman-Fried’s appearance (virtually) at the DealBook Summit in New York City. He was asked some tough questions and maintained he was unaware of the bad practices inside FTX and Alameda.
BlackRock CEO Says ‘Next Generation for Markets’ Is Tokenization from Decrypt – Also speaking at the DealBook Summit this week as Larry Fink, the CEO of BlackRock. While he is generally bearish on crypto, saying most crypto-related companies are not going to be around in the future, he did say that the tokenization of securities will be transformational for markets.
Crypto Lender BlockFi Follows FTX Into Bankruptcy from The Wall Street Journal – In an unsurprising move crypto lending platform BlockFi filed for Chapter 11 bankruptcy this week after Alameda Research defaulted on a $680 million payment last month.
As Pipe’s founding team departs, tensions rise over allegations from TechCrunch – There have been some curious changes at the executive levels inside Pipe. The entire founding team has quit, although one of the co-founders is now interim CEO and the old CEO is now Vice Chairman. There have also been allegations of undisclosed bad loans to crypto mining firms and general mismanagement. It is all very strange.
Bankers design a new blockchain that works like bitcoin — but it’s regulated from American Banker – Some large banks have got together and created a new blockchain-based payments system called the Regulated Liability Network. Citi, Wells Fargo, TD, and U.S. Bank are some of the banks behind this new system which uses a shared ledger that can work with any current or future instant payments networks and digital currency.
‘The more you submit, the more we get paid’: How fintech fueled covid aid fraud from The Washington Post – This article talks about some of the nefarious activities that went on at fintech companies that were part of the Paycheck Protection Program. While it is likely some fintechs were engaged in bad faith activities, the vast majority of lenders were doing everything they could to get money to the small businesses who needed it (read my response to the WaPo piece here).
Can the SBA make its 7(a) loan program attractive to fintechs? from BankingDive – There is a new proposal out from the SBA that would allow more fintechs to become part of the popular 7(a) program. Fintech lenders do a better job of supporting small businesses, particularly in underserved communities, and would help expand the program.
Surviving FTX: Fintechs and banks untangle themselves from American Banker – While most banks and fintechs remain unaffected by the FTX/Alameda debacle there are some companies that had limited exposure and some where there was a potential partnership was in the works.
‘Bank Black’ Movement Gets Lift With $45 Million Investment In Startup Whose Founders Include Killer Mike And Andrew Young from Forbes – One of the largest funding rounds announced this week was for Greenwood, a digital bank focused on the Black community. The round, led by Pendulum values the Atlanta-based digital bank at $325 million.
PIX could go international as Brazil’s central bank shares protocols from Fintech Nexus – Pix is probably the most successful fintech product of the last decade and now the Brazilian Central Bank, the creator of Pix, is making its protocols widely available for others to use.
Every Thursday afternoon, the Fintech Nexus News team and a special guest discuss the news of the week live on YouTube, LinkedIn, and Twitter. We have now made the show available in podcast format – click on the audio player below.
