Report: Irish Consumers Still Don’t Trust New Technology, Including Digital Challenger Banks

Offering more mobility and quicker financial services, challenger banks appear to be destined for success, however, the Irish consumers’ trust in new technology seems to be a major challenge to mass adoption. This, according to Fujitsu’s latest “From Demanding to Discerning: Tech and the New Banking Customer” report.

The majority of Irish consumers are still using traditional financial services, instead of the newer challenger banks, the report noted. Three quarters, or 75%, of Ireland’s consumers, are only using a “high street” bank, which makes the country the most traditional in Europe.

Only around 10%, or one in ten, Irish consumers are banking only with a challenger bank. Around 11% of Millennials and 12% of Gen Z consumers in Ireland are using (only) challenger banks, the report revealed.

Only 15% of Ireland’s consumers say they “fully trust” challenger banks. This appears to be evident when considering that just 13% of the nation’s consumers solely use a challenger bank. The reluctance to use new banking solutions and financial services makes Ireland one of the most conservative nations in Europe when it comes to banking preferences.

Although Irish consumers have demanded improved banking services from financial services providers, the general public has major reservations regarding whether challenger banks or even traditional financial institutions will be able to safeguard their private data.

These reservations might prevent or slow down technology adoption for modern financial services providers. Significantly, around 61% of Ireland’s consumers are concerned that technology might put their personal data at great risk. About 55% of the Irish public says these concerns are among the main reasons they’re not considering adopting more modern financial services in the foreseeable future.

However, many Irish consumers say they still prefer speed and ease of use over better security as 26% said they want to be able to conduct faster transactions. This suggests that the speed at which challenger banks provide financial services may help attract more clients while also  retaining them. In fact, 33% of Ireland’s consumers said they really value how quickly challenger banks offer them pertinent information regarding their finances.

Throughout Europe, challenger banks appear to be well-positioned to gain ground in the next few years. When looking five years ahead:

  • 17% of Ireland’s consumers are expected to bank solely with a challenger bank (up from around 14% in 2019).
  • 35% of Ireland’s citizens will be banking with some combination of challenger and traditional financial institutions (up from about 21% in 2019).
  • 48% will be banking solely with a legacy bank (down significantly from 68% in 2019).

Younger users are expected to be the primary users of challenger-only banking services, with more than 20% of those aged between 16-34 prepared to make the switch to modern financial services providers by 2023.

Anita Burke from Fujitsu Ireland stated:

”Looking at how Irish people bank, they clearly value digital services but the ability to walk in to a bank branch is very important. Irish people still clearly value the human element of banking. Like all sectors, technology will play an increasingly important role for financial services but its successful adoption will rely on how financial institutions both build and maintain trust.”

Burke added:

“The collection and use of data will be particularly important. Showing consumers how technology like AI and blockchain can use their data positively and securely for uses like combating fraud will create a stronger bond between these companies and their consumes.“

Distributed Cybersecurity Firm Gladius Dissolves Operations without Complying with SEC Order to Reimburse Investors

Gladius, a “distributed” cybersecurity firm, has reportedly dissolved its operations without complying with the orders from the US Securities and Exchange Commission (SEC) to reimburse the project’s investors.

Alex Godwin, the company’s co-founder and CTO, confirmed the dissolution of the firm through a message sent to Gladius’s official Telegram channel on Friday.

As noted in the message (which was reportedly signed by Gladius’ development  team):

“The company no longer has funds to continue. We regret to inform you that Gladius Network LLC has ceased operations effective immediately and has filed for dissolution. Despite our best efforts, the company no longer has funds to continue operations.”

The company’s message says that the project’s codebase, maintained by the Gladius team, will continue to be accessible online for the next three months. Anyone can use the source code, the company said.

Gladius’ management was charged for selling unregistered financial securities by the SEC (in February 2019), after the company had self-reported to the federal regulator.

Gladius’ developers raised approximately $12.7 million in digital currency (GLA) during the initiative’s token sale during the final months of 2017. The token traded at  well over a dollar back then. Today it hovers around $0.03. The SEC said that it had taken a fairly lenient approach towards Gladius since it had self-reported.

The regulator stated:

“The SEC did not impose a penalty because the company self-reported the conduct, agreed to compensate investors, and will register the tokens as a class of securities.”

SEC’s Cyber Unit Chief Robert A. Cohen reiterated that sentiment stating:

“Today’s case shows the benefit of self-reporting and taking proactive steps to remediate unregistered offerings.”

Gladius is only one of several other companies that have failed to meet their deadlines, which require them to reimburse investors, after being charged for regulatory violations by the SEC.

Gladius’ investors have been critical of the SEC’s lenient approach to the matter. Gladius (GLA) token holders have launched a Telegram group, called Gladius Rektiers, in order to hold discussions regarding a plan of action.

Redditor Bitttburger noted:

“The SEC apparently doesn’t bother enforcing its own judgments. And instead spent the next year and a half granting them extensions. Please join us in the telegram chat for Gladius investors discussing legal recourse:

Main Gladius channel has of course been closed down.”

Opinion: Binance Says it Will Sue the Block, the Block Clarifies its Reporting

Crypto centric digital news site The Block is making some news about itself.

Last week, the Block reported on an alleged shutdown of a Binance office located in Shanghai.

As most crypto followers know, cryptocurrency trading is illegal in China – even while the Chinese government is focusing on developing its own Central Bank Digital Currency (CBDC) as well as making blockchain development a core policy item. Add to this the fact that a good amount of crypto-mining takes place in China and the country is well known for being active in the digital asset sector. It is widely assumed the OTC markets in crypto remain a vibrant reality across China.

Several days ago, the founder and CEO of Binance, “CZ,” indicated he was unhappy with the reporting and quickly pulled out the big legal guns and said Binance would be suing the Block.

As the dustup devolved, the Block has found themselves as being part of the news instead of covering it.

In a followup post, the Block provided clarity in the post by “Setting the record straight on our Binance reporting.”

The Block has made some changes to the original reporting – something it clarified in the followup report.

The crypto sector has rapidly emerged to create a dynamic sector of Fintech challenging regulators and policymakers globally. For this sector of Fintech to evolve effectively, and become a sustainable ecosystem, it is absolutely vital that an independent media emerges to cover the good, the bad and the simply ugly.

Crowdfund Insider stands by the Block’s approach and suggests that CZ reconsiders his legal challenge – something that will not help Binance’s cause and stands to undermine its image. Binance needs the Block, a publication that is known for its balanced reporting, just as much as the Block needs them. Hopefully, cooler minds will prevail.

Coinbase UK Now Supports Four New Assets: XTZ, DAI, EOS, & LINK

Cryptocurrency exchange platform Coinbase announced last week that Coinbase UK now supports four new assets on its platform, which are Tezos (XTZ), Dai (DAI), EOS (EOS), and Chainlink (LINK).  Coinbase reported that by supporting the new assets, the platform grants customers access to buy, sell, and trade even more assets through a GBP wallet, funded by a GBP bank account or credit and debit card. The crypto portal also noted that the support follows the complete reinstatement of its GBP wallet functionality and the recent launch of BAT, ZRX, REP, XLM, and XRP.

“Adding support for even more assets brings us closer to our long-term mission to help bring economic freedom, innovation, and equality to everyone, everywhere.”

The support of the assets also comes just days after Coinbase announced its Coinbase Card supports five new assets and ten new countries. The card is now available in a total of 29 countries, with customers in Bulgaria, Croatia, Denmark, Hungary, Iceland, Liechtenstein, Norway, Poland, Romania, and Sweden being able to spend their crypto balance using a contactless Visa debit card in millions of locations worldwide.

“We’ve also more than doubled the number of assets available to spend — going from 4 to 9. XRP, BAT, REP, ZRX, and XLM wallets can now be used to buy anything from coffee to Christmas shopping. These five new assets join BTC, ETH, BCH, and LTC. Spending crypto as easily as money in your bank account is exactly what Coinbase Card lets you do. But for us, it doesn’t stop there. Spending summaries, combined with our brand new monthly statements feature, make tracking your crypto spend easy.”

Bitfinex Slams “Copycat Lawsuit” Filed in State of Washington

Bitfinex, a beleaguered crypto exchange, was hit by a class-action lawsuit last week filed in the U.S. District Court for the Western District of Washington.

Bitfinex is also the target of an investigation that was launched by the New York Office of the Attorney General. The AG claimed earlier this year that Bitfinex operators, who also control Tether, engaged in a cover-up to hide a loss of $850 million of “co-mingled client and corporate funds.”

In October, a separate class-action lawsuit was filed by against Bitfinex and Tether, alleged creators of “Largest Bubble in Human History.”

Bitfinex stated earlier this month that it had advised the U.S. District Court in the Southern District of New York of its intention to file a motion to dismiss the class-action lawsuit it deemed “frivolous.”

Earlier today, Bitfinex slammed the class action filing in a blog post:

“On November 22, without notice to us, a class action complaint was filed against Bitfinex and Tether in the U.S. District Court for the Western District of Washington. This copycat lawsuit suffers from the same multitude of deficiencies as the unsound complaint filed in the U.S. District Court for the Southern District of New York on October 6. The Plaintiffs’ claims here are similarly without merit, and Bitfinex strongly contests the bogus research purporting to support them.

As we predicted last month, mercenary lawyers continue to try to use Bitfinex and Tether to obtain a payday. To be clear, there will be no nuisance settlements or settlements of any kind reached. Instead, all claims raised across both actions will be vigorously contested and ultimately disposed of in due course. Once they are, Bitfinex and Tether will fully evaluate their legal options against those bringing and promoting the baseless claims.”

Bitfinex called the accusations “absurd and groundless” while stating the attack was not just directed at them but the entire digital token ecosystem.

“Our fight is the community’s fight,” stated Bitfinex.

Bitfinex also claimed that has never used Tether token issuance to manipulate cryptocurrency pricing. Multiple industry observers and participants have claimed that some crypto trading, and perhaps the price of Bitcoin, are impacted by bogus trades and manipulation.

Bitfinex called it “irresponsible” to suggest that its company had engaged in any illicit activity.


Overfunding: Crowdcube Success Oval Money Quickly Surpasses £1 Million Funding Target on Seedrs

Less than two years after securing £626,310 through its Crowdcube funding round, European automated saving and crowd investing marketplace Oval Money launched an equity crowdfunding campaign on Seedrs and has quickly secured its initial £1 million funding target.

As previously reported, Oval Money provides easy to read, readily available information on everyday expenses. The marketplace explained that each week its app automatically uses the steps and creates a saving balance that will be moved weekly into a personal and secure digital wallet. 

The Oval Money app helps users save money and then find the best financial products to help make those savings grow. Oval was created to help bring inclusion, education, and fairness back into personal finance. We aim to empower users to TRACK their full financial history, LEARN to make better spending decisions, SAVE automatically, and crowd INVEST through a marketplace of financial products.”

Users may now select one or more of Oval’s services and integrate these with their existing banks and cards:

  • Oval Coach: Provides tailor-made financial missions, promoting good financial habits.
  • Oval Future: Helps users set aside savings and invest in their future through our marketplace of financial products, automatically and on a recurring basis.
  • Oval Activities: Keeps track of every financial activity across any card and account, linked to the app in open banking. It analyses transactions to help users better understand and then manage their spending habits.
  • Oval Pay: Currently launched only in Italy, is the only current account in Europe that we believe allows users to automatically save and invest in their future while they spend.

Oval Money further explained that it “speaks” to a generation of digital natives with busy lives and many dreams, but low financial education.

“As an independent distribution platform, we aim to cater for this generation, 25 to 35 year old young adults, by facilitating access to a wide range of products, streamlining complex onboarding processes, and providing a transparent overview of their money. We believe that access to financial products shouldn’t be closed to be just for the wealthy few.”

Funds from the Seedrs round will be used for the following:

  • Expanding the Oval platform from Italy and the UK as major markets to a number of other southern European markets, starting from Spain, thus spending on new key hires and marketing campaigns.
  • Grow product offering in the Oval Future section

Oval Money went on to add:

“We aim for this to include the ability to access early stage investments through Seedrs as a new asset class for our investors. Other fixed rate products that our users have loved in the past are in our pipeline, as well as many more investment opportunities from exciting new partners.”

Decentralized Securities Depository, dba Openfinance, Raises $8.6 Million. Seeks Up to $50 Million

Decentralized Securities Depository, LLC, dba Openfinance, has raised $8.6 million from 19 different investors, according to a filing with the Securities and Exchange Commission (SEC).

Decentralized Securities Depository/Openfinance is a secondary trading market for digital securities. Simply naming the company decentralized indicates the utilization of blockchain or distributed ledger technology (DLT).

Openfinance has an alternative trading system (ATS) license and provides secondary trading for digital securities to both individual and institutional investors. Openfinance seeks to provide additional liquidity in both traditional and non-traditional markets. The company recently tokenized a hedge fund offering as well as a media firm, Current Media. Openfinance believes that the Reg A+ exemption may provide a path for future digital asset offerings.

The marketplace operates 24/7 and is providing trading services to investors both within the US as well as a growing list of international markets such as the UK, Germany and France.

Openfinance operates wholly-owned broker-dealer Sageworks Capital as well. Openfinance has partnered with the three top digital securities issuance platforms: Securitize, Harbor and Polymath.

Openfinance is part of the building block of building a full-stack digital securities ecosystem. The Form D filed with the SEC indicates that the company is hoping to raise up to $50 million.

Openfinance was founded by co-CEO Juan Hernandez who filed the document with the SEC.

The advent of digital securities is accepted as a given it is more a question of how long will it take to migrate from the traditional, more analog, operations of today to a more streamlined digital asset environment. In multiple jurisdictions around the world, the transformation to digital securities is moving forward at various speeds. At times, regulators have struggled to keep up with the transformation.

Australia-UK “Fintech Bridge” Is Under-Utilized, as there’s Significant Potential for New Agreements, Says Aussie Senator Jane Hume

Australia’s Senator Jane Hume has suggested that there’s significant potential for new international agreements to lead the nation’s Fintech companies into emerging financial markets. Hume pointed out that Australia’s present agreement with the UK to promote exports of Australia’s financial technology has not been used to its actual potential.

Assistant Minister for Superannuation, Financial Services and Financial Technology stated during a Visa fintech panel, held in Melbourne on November 22:

“The ‘Fintech bridge’ is probably under-utilized, particularly at the moment in the Australia-to-the-UK side of things.”

The “Fintech bridge” agreement was introduced last year, in order to encourage trade and other business activities for traditional banking industry disruptors across both the UK and Australian markets.

Senator Hume noted that the UK agreement appears to be a promising project, however, it has only taken the initial steps towards facilitating international trade between the two countries.

Last month, the UK department of international trade sent a group of UK-based firms to Melbourne to attend the Intersekt Fintech festival.

Several UK competitors, such as software developer TrueLayer and OakNorth, a bank for small business owners, suggested they’d penetrate Australian markets, before the introduction of the Open Banking scheme.

The UK’s fintech industry is significantly more mature than the Australian market. The UK has already adopted an open banking regime in which consumers can share data between different financial institutions in order to be eligible for better banking deals.

At present, there are 526 Fintech firms operating in Australia as of this year, according to a Visa Future of Fintech report published on November 22. This represents an increase of around 37% since last year.

Half, or 50%, of these firms intend to expand their operations in overseas markets in the coming year, according to this year’s EY Fintech census. The US and the UK have been identified as the most “popular” markets.

Senator Hume mentioned that although it’s still early days for Fintech, the Australian government is committed to establishing similar agreements with other countries, including (potentially) with Singapore in order to assist Australian firms in expanding their operations into that particular region.

Hume remarked:

“Certainly, when I was in Singapore they were very keen to establish something similar. We have started conversations already.”

The goal is that another Fintech bridge can be established as part of an Australia-Singapore digital services deal which is currently under review.

There’s also the possibility of a potential trilateral Fintech deal between Australia, Singapore and the UK, Hume revealed.

She added:

“That is a really exciting opportunity, particularly when we start talking about things like data and access, where we are so far ahead of the curve.”

Niels Maartens, CCO at co-working space and business support hub YBF Ventures, said during the panel discussion that Australia’s Fintech sector had been maturing.

Maartens noted:

“The hype is lowering and the amount of revenue growth is up and I like that aspect of it.”

However, local Fintech industry participants might not be generating enough sales to consider looking into expanding their operations into overseas markets.

Visa’s report reveals that only around 10% of local Fintechs have generated revenues of at least $1 million, while another 33% are post-revenue but have made less than $100,000 in the past year.

A Senate inquiry into the Fintech and Regtech (regulatory technology) industries is presently being conducted. Early submissions have suggested that it’s important to adopt more stable policies and guidelines, and hire new talent.

Bigger is Better: Digital Brokerage Charles Schwab Buys TD Ameritrade for $26 Billion

As predicted last week, online broker Charles Schwab (NYSE:SCHW) has announced the purchase of TD Ameritrade (NASDAQ:AMTD) in a deal worth $26 billion.

According to Schwab, the all-stock transaction represents a 17% premium of TD Ameritrade’s average share price as of November 20, 2019. Shares in TD moved little in pre-market trading as much of the gain had already taken place when word of the acquisition became news last week. Shares in Schwab held steady in the pre-market too. TD Ameritrade stockholders will receive 1.0837 Schwab shares for each TD Ameritrade share.

The combined entity will handle 24 million client accounts with more than $5 trillion in client assets. Schwab + TD Ameritrade will generate a total annualized revenue of $17 billion and pre-tax profits of approximately $8 billion.

Schwab President and CEO Walt Bettinger issued the following statement:

“We have long respected TD Ameritrade since our early days pioneering the discount brokerage industry, and as a fellow advocate for investors and independent investment advisors. Together, we share a passion for breaking down barriers for investors and advisors through a combination of low cost, great service, and technology. With this transaction, we will capitalize on the unique opportunity to build a firm with the soul of a challenger and the resources of a large financial services institution that will be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.”

TD Ameritrade EVP and CFO Stephen Boyle said that partnering with Schwab on this transformative opportunity makes the right strategic and financial sense for TD Ameritrade:

“We share a common history—a journey since 1975 that has made Wall Street more accessible and financial dreams more attainable for millions of Americans. Our associates are fiercely proud of that legacy and all that we have accomplished to make TD Ameritrade one of the premier firms in financial services. Now we look to join forces with a respected firm like Schwab that shares our relentless focus, and to do more than we could do apart. Together, we can deliver the ultimate client experience for retail investors and independent registered investment advisors. We can continue to challenge the status quo, pooling our resources and expertise to transform lives—and investing—and deliver sustainable, long-term value to our many stakeholders.”

The deal is expected to close in the second half of 2020. “Integration,” a term that may also be construed as workforce reduction, will begin soon after. Schwab stated that “reductions in staff are a necessary part of achieving overall expense synergies.”

Synergies generated by the deal are expected to be 10-15% accretive to GAAP EPS and 15-20% accretive to Operating Cash EPS in year three, post-close. Expense reductions are predicted to be approximately $1.8 to $2 billion. Overlapping services will be rationalized along with the extensive real-estate holdings of the two firms. Schwab currently has over 365 physical branches. TD Ameritrade operates over 275 branches nationwide. These need to go as the cost to operate them is high.

Schwab stated that the transaction is squarely in line with Schwab’s long-term strategy – part of which is the sheer economies of scale accomplished by an instant doubling of their client base.

“It allows Schwab to continue to add scale on top of its organic growth, with the addition of approximately 12 million client accounts, $1.3 trillion in client assets and $5 billion in annual revenue. We expect this added scale to lead to lower operating expenses as a percentage of client assets (EOCA), which helps fund enhanced client experience capabilities, improve the company’s competitive position and further its financial success. This is our Virtuous Cycle at work.”

While both Schwab and TD Ameritrade are far bigger than many of the Fintech upstarts nipping at their heels, the digital brokerages have shifted from being the disruptors to becoming disrupted by these more agile Fintechs.

In recent weeks, emerging Fintech competitors to traditional online brokerages had worried the sector with their no-commission approach to trading along with their asset-light operations. Both Schwab and TD Ameritrade had announced the removal of trading commissions following the lead of Fintechs like Robinhood – an investment platform that has been hoovering up customers at a rapid rate. The elimination of commissions gave rise to the question if the competition was becoming a race to the bottom.

Earlier this year, Robinhood raised $323 million in financing at a $7.6 billion valuation. Robinhood prominently promotes zero fees on trading in stocks, funds, and options while also providing crypto trading. In October, Robinhood announced FDIC insured savings accounts with a high promotional interest rate to encourage more account creation (2.05% APY at the time of the announcement).

Schwab and TD Ameritrade provide trading and wealth management platforms, custody platforms, retirement services, banking, and asset management.

Of note, Schwab operates Charles Schwab Bank an entity that provides banking and lending services and products – a service TD Ameritrade clients will now find as part of the basket of product offerings.

So is bigger better or will this be another merger that suffers from hubris and a clash of cultures? The jury is out on its verdict.

Technology is at it is best when it is ubiquitous but not obtrusive. We want access to it when we need it otherwise don’t be a bother.  This holds true for Fintechs as well. While Fintechs like Robinhood have caught the wave of digital innovation boosted by its ethos of democratizing financial services, Schwab+TD are positioned to challenge Robinhood head-on – if corporate strategy allows it to make the right decisions. We live in a world where brokerage (and bank) branches are not necessary at all. Between Schwab and TD the two companies have over 640 offices.

New services by the traditional brokerage must be part of the package. This includes access to alternative investments like crypto, real estate and non-traditional funds. Schwab recently announced a partnership with iCapital that enables wealthier clients to access alternatives. Sophisticated services need to filter down to the regular guy.

The Charles Schwab Bank is key to the success of the merger. The digital bank offers unlimited ATM fees and 0% foreign transaction fees for consumers – a big deal. Unfortunately, savings rates have lagged the competition but this can be easily addressed. Schwab needs to bring its banking services out of the shadows and promote it more effectively. The Charles Schwab Bank is also in desperate need of a digital makeover.

The combination of the two brokerages will take some time. It is not clear how the two cultures will mix. Meanwhile, Fintechs will continue to iterate, adapt, add new services and expand, unhindered by a long legacy of financial service tradition.


Report: OakNorth and N26 Have Received the Most Funding Out of All US and European Digital Banks

Digital-only banks, or neo-banks, are not dependent on outdated, legacy financial infrastructure. These virtual banks are more efficient than traditional banking institutions because they operate without the costly networks of physical branches.

Neobanks have been working towards transforming the retail banking sector in major financial markets throughout the world.

According to Crunchbase data, OakNorth ($1 billion) and N26 ($670 million) have received the most funding out of all other major US and European neobanks.

Other top European and American digital banks include Atom bank, Revolut, Monzo, Chime, Starling Bank, Varo Money, and Aspiration. These digital-only financial services providers have benefited from an innovation-friendly regulatory environment and have picked up significant momentum in Europe during the past three years.

Several European digital banks are already entering the US market leveraging the experience generated by operating in continental Europe and the UK.

Although many of the relatively older digital banks are based in the US, which includes Simple (launched in 2009) and Moven (established in 2011), the American digital bank ecosystem has not made as many advancements as Europe’s digital-only banks. This is largely due to a convoluted regulatory regime.

In the UK, one of the most robust Fintech markets, regulations are relatively streamlined. Digital banks have been encouraged to compete with traditional brick and mortar banks.

The US, by comparison, possesses a stultifying regulatory approach that makes it exceptionally difficult to receive a federal bank charter. Few digital banks possess a federal banking charter. Lobbying by traditional financial services firms have also slowed the development of digital banks.

Agile Fintechs have learned to adapt and today most US-based digital banks partner with a chartered bank to provide bank-like services.

Consumers, particularly the younger generation, have become increasingly frustrated with traditional banking services providers. Millennials are also more eager, or inclined, to consider using digital solutions, which may lead to more people using digital banks in the future.

There are many reports that have been prepared (including Business Insider’s Evolution of the US Neobank market) to address questions related to how digital banks and other modern Fintech firms are planning to establish their operations in the world’s financial markets.

Bitcoin Store: UK Citizen and Fraudster Renwick Haddow Barred by SEC

Renwick Haddow, a UK citizen who allegedly perpetrated multiple frauds, has received additional sanctions from the Securities and Exchange Commission (SEC). Haddow apparently also adopted the alias “Jonathan Black.”

Haddow was previously disqualified as a director of any United Kingdom company for eight years, and was sued by the UK Financial Conduct Authority for operating investment schemes that lost investors substantially all of their money.

According to a filing from last week, Haddow has been barred by the SEC from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and barred from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer.

In 2017, the SEC filed fraud charges against Haddow, who was living in New York, alleging he as the “clandestine founder” and creator of a Bitcoin platform and a chain of co-working spaces located in former bars and restaurants. The SEC said that Haddow fleeced investors while hiding his checkered past in the UK. There were several allegedly fake companies; Bar Works Inc., 7th Avenue. and the Bitcoin Store Inc. The SEC said that between January 2015 and June 2017, Haddow, through Bar Works, 7th Avenue, and Bitcoin Store, collectively raised over $37 million from investors. Haddow also founded and controlled the unregistered broker-dealer, InCrowd Equity, Inc. which he used along with other marketing platforms to promote and sell securities. The Bitcoin Store as apparently a platform for users to trade and hold Bitcoin.

In 2018, Haddow was extradited to the United States from Morocco by the US Department of Justice. Haddow has been the target of a concurrent criminal prosecution by the US Department of Justice.

On May 8, 2019, Haddow pled guilty to two counts of conspiracy to commit wire fraud and two counts of wire fraud. On September 10, 2019, a final judgment was entered by consent against Haddow.

According to a report by World Policy posted in 2015, Haddow allegedly ran a scam in the UK where he “siphoned a conservative estimate of $180 million using a number of fabricated alternative investments.”

Digital Currency Pioneer David Chaum Announces Upcoming Release of xx Network, a Blockchain for Conducting Secure Transctions

David Chaum, who’s widely known for inventing the world’s first digital currency, called “e-Cash,” during the early 1980s, revealed on November 22 the upcoming release of the xx network whitepaper and the Praxxis technical brief.

The brief will reportedly provide details and key insights into the xx network and “xx coin,” a blockchain and cryptocurrency supported by Elixxir and Praxxis technology.

According to a press release shared with Crowdfund Insider, Chaum has “described key features of the xx network consensus protocol, including quantum-secure trustless initialization, an unmanipulatable random seed, constant-sized endorser sampling, and compact quantum-secure group signatures which provide unprecedented efficiency.”

The release mentioned that the xx network is combined or integrated with the Elixxir “metadata-shredding” technology. The xx network offers a “protected digital sphere” where people can share project ideas and concepts, sell various products and services, and securely and privately exchange value.

The xx network whitepaper and the Praxxis technical brief should be available next week, the release noted.

Chaum stated:

“The xx network and xx coin will empower individuals to protect their privacy and choose how data is collected about their digital lives. In a world where digital privacy is threatened by large, powerful organizations, the xx network and xx coin secure parity between individuals and centralized powers.”

The announcement was reportedly made in Amsterdam at the Centrum Wiskunde & Informatica (“National Research Institute for Mathematics and Computer Science”), where Chaum performed pioneering research on digital currencies and cryptography systems.

The lecture is part of a two-day event which featured Chaum being honored with the Dijkstra Fellowship.

Crypto Exchange OKEx Reveals Four Major Business Partners for its Global OKB Utility Token

OKEx, one of the world’s largest futures digital currency exchanges, revealed an update on November 22 regarding its four main business partners for OKB, the trading platform’s globally accessible utility token, which is aimed at “connecting digital asset projects.”

According to a press release shared with Crowdfund Insider, the OKB token will be listed on Ledger’s hardware wallet, which will help crypto traders and institutional clients keep their digital assets safe and secure in cold or offline storage. Ledger reportedly has clients in 165 different countries and has sold around 1.5 million of its wallets.

OKB is now also listed by Aliniex, the largest over-the-counter (OTC) exchange in Vietnam, and Bvnex, a leading Vietnamese fiat/crypto exchange. Cryptomall, an online retailer, will also be accepting OKB.

As mentioned in the release:

“These partnerships are part of OKEx’s mission to collaborate with mainstream and localized partners, making the OKB ecosystem more comprehensive for its global user base. OKEx and these partners share a similar mission to deliver professional, transparent, and secure trading tools to investors.”

Established in 2017, the Aliniex exchange lets traders purchase and sell digital currencies using Vietnam’s national currency, the Vietnamese Dong (VND). Following the recent integration, Aliniex will support the OKB/VND trading pair. Customers will be able to use OKB to pay for purchases such as file sharing, borrowing crypto-assets, and booking rental cars, making hotel reservations, or phone cards.

Cryptomall is an online retailer that leverages blockchain tech to eliminate fake or fraudulent products from its virtual marketplace. The company keeps all transaction records on the blockchain. The transactions are tracked from the manufacturer all the way to when the buyer acquires the items. Following the Cryptomall integration, OKEx customers can buy over 1 million items via the online retail company with the OKB token.

Andy Cheung, head of operations at OKEx, stated:

“Ledger, Aliniex, Bvnex, and Cryptomall all share OKEx’s vision to innovative, industry-leading services to cryptocurrency users globally. We are pleased to partner with these companies to expand OKB’s utility, making it easier for traders to participate in the cryptocurrency markets all over the world.

New Bakkt All-Time Record: Over $20.3 Million in Bitcoin Futures Daily Trading Volume, 2728 Futures Contracts Traded

Bitcoin (BTC) futures daily trading volumes on crypto-asset platform Bakkt recorded another all-time high, according to data obtained from the Intercontinental Exchange (ICE), the trading desk’s parent company, which also owns the New York Stock Exchange. Over $20.3 million in Bitcoin futures contracts, or 2728 futures contracts, were reportedly traded on November 22.

Bakkt’s new daily trading record represents approximately a 66% increase over the previous 24-hour period and is about 30% greater than the previous all-time futures trading high. The previous record was set on November 9, 2019.

Open interest from yesterday presently stands at around $1.75 million, which represents a 29% increase over the previous 24-hour trading day. Bakkt was off to a relatively slow start when it first launched in September 2019. However, the trading volumes of the exchange’s physically settled Bitcoin futures contracts have been steadily increasing.

Bakkt’s latest record volume has come at a time when the Bitcoin price has dropped significantly. BTC fell below $7,000 mark on November 23. Previous surges in crypto futures volumes have also been accompanied by large spikes in BTC price, as experienced from October 25 and November 8 (according to CoinMarketCap data).

ICE, which runs 23 major exchanges throughout the world, has most recently reported Bakkt’s BTC futures trading price at $7,240 on November 22.

Bakkt’s management recently revealed that it is planning to further expand its offerings, including Bitcoin-related products, due to increased institutional interest.

Earlier this week, Bakkt stated that cash-settled BTC futures would be tradable on ICE Futures Singapore, starting on December 9 of this year. Regulated options contracts for BTC are scheduled to be introduced on the same date.

Oman Oil and Orpic Group and HSBC Bank Oman SAOG Perform First Blockchain-based Trade Finance Transaction in the Country

Oman Oil and Orpic Group and HSBC Bank Oman SAOG have reportedly performed the first blockchain-based trade finance transaction in the Middle Eastern nation using R3’s Corda technology.

According to a November 23 report from Oman Observer, Oman Oil and Orpic Group, the country’s largest oil and gas businesses, and HSBC Bank carried out a DLT-based trade finance transaction that involved the sale of polypropylene to Abu Dhabi’s National Carpet Factory. The transaction was conducted using R3’s Corda, an open-source DLT platform.

HSBC’s Oman division used the transaction to advise a digitized letter of credit on a blockchain network. Oman Oil and Orpic Group was listed as the beneficiary of the letter of credit. Applying distributed ledger technology helped both parties finalize the trade finance transaction in less than 24 hours. When using legacy systems, the same process takes around 5 to 10 business days.

Nizar al Lawati, CFO at Oman Oil and Orpic Group, noted that the firm is proud to be among the first businesses in the nation to encourage the digitization of trade finance via DLT.

Sadiq al Lawati, finance and strategy commercial value partner at Oman Oil and Orpic Group, remarked:

“This blockchain pilot is an important station in our journey towards digitisation, a journey that started with Artificial Intelligence (RPA++) and continues to embrace new disruptive technologies.”

Financial organizations throughout the world have been using blockchain tech in order to streamline routine business procedures. In October 2019, Archax, a UK-headquartered digital securities exchange, announced that it would use Corda’s technology to handle post-trade activities.

Large-Scale Data Infrastructure Provider Compute North Launches 100+ Megawatts Facility in Kearney, Nebraska

Compute North, an established provider of high-powered, large-scale data infrastructure, recently revealed that it has launched its biggest co-location facility in Kearney, Nebraska. The new data center facility is the company’s third site. Other sites are based in Texas and South Dakota. Compute North’s latest data center is reportedly its “highest power offering to date.”

As mentioned in a press release shared with Crowdfund Insider:

“The Kearney facility will offer 100 megawatts of power to support large-scale data operations and to serve as a critical location for expanding upon the blockchain and hosting infrastructure.”

The facility has been created specifically for handling “large-capacity” consumers with more than 1MW of requirements by “delivering accessible, affordable, reliable and secure collocation” to users throughout the world.

The facility’s power and high connectivity with the relatively low energy costs of running the operation make it capable of effectively handling blockchain platforms, machine learning technologies, and cryptocurrency mining.

Compute North CEO, Dave Perrill, stated:

“Our new Nebraska hosting site is already more than two-thirds committed and is continuing to ramp up quickly. We are very excited to be a part of the Kearney community as we continue to deliver scalable, fast deployment data center solutions that help organizations drive maximum ROI.”

As noted in the release:

“With a combined 20+ years of executive experience running similar operations, the technical experts at Compute North know how to deliver high-scale, highly available colocation solutions for blockchain infrastructure.” 

These solutions will drive the future demands of enterprises that aim to quickly grow and adapt while working in a stable environment. Compute North houses all related processes and infrastructure in one location. This helps to reduce risk and significantly reduce unnecessary expenditures.

The increased market demand for efficient computing power has fueled interest and the need for establishing modular data centers, including Compute North’s recently launched facility.

As noted in the release, the main benefits to Compute North users will include:

  • Quick Deployment: Compute North’s customers are able to get their systems up and running quickly, because the company’s solution uses a “container” infrastructure that can be easily “ordered, customized and delivered in weeks.”
  • Security: The company’s facility has constant surveillance and implements the best security measures to ensure that users’ equipment and data is safe at all times.
  • Scalable: Customer demand is easily met due to the facility’s “repeatable” design, which also allows the company to effectively scale its operations.  As customer needs continue to change, Compute North says it is able to address new requirements quickly while also being able to create the next phase of an infrastructure project in “a few months versus a few years.”
  • Efficient: Co-location sites are conveniently located close to “reliable and cost-efficient power sources.” Containers have also been built to “optimize the power and heat management in a tightly integrated framework.” This helps ensure a suitable environment for high-computing requirements.

Compute North also hosts and distributes equipment from Chinese crypto mining giant Bitmain, Whatsminer, Canaan, and Obelisk.

Compute North says it specializes in logistics, GPU and rendering, deep and machine learning, and repair and quality assurance.

Authorities in China Reportedly Shut Down Local Cryptocurrency Exchange BISS, 10 Individuals Arrested

Authorities in China continue to crack down on crypto-related businesses. Recently, the nation’s police officials closed down local digital asset exchange BISS and took 10 people into custody, as they were suspected of being involved in the trading platform’s business operations.

On November 22, 2019, Chinese media outlet Sohu confirmed that BISS had been shut down, however, the actual date when the incident took place remains unclear.

Dovey Wan, founding partner at digital assets investment firm Primitive Ventures, noted via Twitter that the Chinese crypto community was aware of issues involving BISS for the past two weeks. However, the report appears to have been released much later. Wan mentioned that the Beijing-headquartered crypto trading platform in question is “a relatively known, up-and-rising exchange.”

BISS’s management posted a blog on November 18, 2019, in which it addressed issues related to user withdrawals. The exchange also said that authorities in China had suspended its operations.

“According to market sources, it is understood that BISS’s operations have been halted following an enquiry by China’s regulatory authorities around its services offered to users, which may not be aligned with capital controls regulations in China.”

The exchange further claims:

“The enquiry by the authorities are specific to the company’s offerings, and not related to user deposits. It is expected that users will be able to access their funds in due course once the enquiry is completed.”

BISS states in its blog post that its business operations were suspended while local authorities investigated the case in order to protect user interests. The exchange operator also mentioned that it plans to fully cooperate with China’s law enforcement agencies.

Authorities in Shenzhen, a major city in the Chinese province of Guangdong, identified 39 different digital asset exchanges that had been operating without following appropriate regulatory guidelines.

Shenzhen’s law enforcement officials have also issued a warning regarding illicit activities involving the use of cryptocurrencies, particularly via digital asset exchanges. Additionally, police officials in Shanghai have issued similar warnings, which include telling Chinese citizens to avoid dealing with companies or individuals selling crypto tokens.

China: WeiyangX Fintech Review

The People’s Bank of China Releases China’s Green Finance Development Report (2018)

In order to introduce China’s achievements and experience in green finance, the People’s Bank of China (PBC) has worked with relevant authorities and organizations to compile the annual China’s Green Finance Development Report since 2017.

Recently, the PBC released China’s Green Finance Development Report (2018). The report comprehensively summarizes China’s green finance development in 2018, and illustrates progress made in the development of green finance standards, writing of Green Industry Guidance Catalogue (2019), performance assessment of green credit offered by depository financial institutions in the banking sector and work progress of the self-regulatory mechanisms of the green finance industry.

As the report points out, China followed two paths, namely top-down promotion and bottom-up exploration, to continuously advance the building of the green finance system in 2018, and delivered remarkable achievements in the reform, innovation and international cooperation on green finance.

The green finance in China has not only secured fast growth but also brought out further social and environmental benefits.

At present, as China brings green finance into a new phase of in-depth development, continued efforts will be made to explore the fundamental theories, improve the green finance standard system, study and reserve more policy tools, encourage product and service innovation, enable extensive and in-depth engagement in global green finance governance, so as to forge ahead with sustainable and high-quality green finance development in China. (Source: PBC)

China Has Approved Several Local Fintech “Sandbox” Projects

In December 2018, the People’s Bank of China and five other central government departments decided to conduct Fintech pilot projects in Beijing, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Chongqing, Sichuan, and Shaanxi provinces.

At present, the specific projects, have been officially approved, including Financial Service Cloud (Fujian), Financial Service Platform for Small & Middle-sized Technology Enterprises (Fujian)Big Data-based AML Monitoring Platform (Sichuan), Distributed Data Application (Shanghai), etc.

Li Wei, director of the Science and Technology Department of PBC, commented at the “4th Global Fintech (Beijing) Summit” in July this year that these pilots could actively explore the use of technology in accordance with existing laws, regulations and regulatory rules, improve the efficiency of financial services, and build best practices for other regions.

The financial regulators in China hope to establish an institutional mechanism that is suitable for the development of fintech through these pilots. He said that these pilots could be regarded as the Chinese version of the “regulatory sandbox”. (Source: Economic Information Daily)

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China’s Pay-With-Your-Face Users Will Reach 760 million in 2022

On November 21st, 2019, iiMedia Research released the “2019 China Pay-with-your face Technology Application Social Value Report”.

According to the report, 2019 marks the “first-year” of pay-with-your-face, and the users of this new payment method will surpass 760 million in China in 2022, replacing the QR code payment as the main payment method. 70% of respondents in the survey believe that pay-with-your-face is safer than the traditional password-model. (Source: iiMedia)

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Ant Financial Services considers Applying for Singapore Virtual Banking License

On November 19th, Ant Financial confirmed, as reported, that it was considering applying for virtual banking license in Singapore. On May 9th 2019, Ant Financial has already been granted a Hong Kong virtual banking license by the Hong Kong Monetary Authority.

(Source: The Beijing News)

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The above is a weekly synopsis of the biggest stories on Fintech in China provided by WeiyangX, part of Tsinghua University, in partnership with Crowdfund Insider.

WeiyangX is the most influential website focusing on Fintech in China. The site covers the latest news, industry data analysis, business practices, and in-depth Fintech cases in Fintech. WeiyangX is incubated by Fintech Lab. Founded by Tsinghua University’s People’s Bank of China (PBC) School of Finance in 2012, the Fintech Lab is the first and leading research entity dedicated to leading best practices, promoting interdisciplinary innovation, and encouraging entrepreneurship in the field of fintech through scientific research and innovative project incubation.

Ten Leading Fintech Firms Took to the Final Stage at Alibaba-backed FintechHK Global Competition

Ten leading Fintech companies recently took to the final stage at the FintechHK Global Competition.

FintechHK Global Competition is supported by InvestHK, the department of the Hong Kong SAR government that handles Foreign Direct Investment. InvestHK supports overseas, mainland China and Taiwanese businesses by helping them in setting up and expanding their operations in Hong Kong.

FintechHK is also powered by the Alibaba Entrepreneurs Fund, a non-profit initiative launched by the Alibaba Group to help small business owners and young professionals achieve their “dreams and visions.”

FintechHK provides a unique global platform for Fintech firms located in all parts of the world to present their skills and talent, attract investments and create beneficial business opportunities.

Sync. from the UK, the world’s first “smart bank” that can synchronize multiple financial accounts via a single app, reportedly won up to $500,000 in investment “commitment” from Alibaba Hong Kong Entrepreneurs Fund, Stan Group, Soul Capital and T12M Ventures. The rewards also included a $20,000 cash price “plus priceless meetings with top investors.”

As the winner of FintechHK Global Competition, Sync. was entered into the “Elevator Pitch Competition,” which was hosted by the Hong Kong Science and Technology Parks on November 8, 2019. Sync. also entered the JUMPSTARTER Global Pitch Competition grand finale, which is scheduled to take place in February of next year.

The FintechHK Global Competition final was “the culmination” of a competition that began earlier this year. The semi-finals were conducted at six different locations in North America, Europe and Asia.

Other notable pitches at the final were from The Block Ledger and Shenzhen Ricequant Technology, Kuala Lumpur’s Deartimeand MC Online, London’s British Pearl, San Francisco’s Koosmik and Realkey, Toronto’s Emperor Investments, and Hong Kong’s Privé Technologies.

These companies are considered to be “high-quality” Fintech firms with diverse focus areas involving innovate financial technology products. All finalists are reportedly planning to use Hong Kong as a launchpad to expand their operations into mainland China, locally and internationally.

The judging panel consisted of new local Fintech investors, venture capital firms, and established corporate venture investors.

The judges included:

  • Alvin Lam, Managing Partner, T12M Ventures
  • Billy So, Chairman, Soul Capital
  • Calvin Choi, Chairman & CEO, AMTD Group
  • Charles Lam, Senior Manager, FinTech & Blockchain, Cluster Team, Cyberport
  • Chibo Tang, Partner, Gobi Partners China, on behalf of the Alibaba Hong Kong Entrepreneurs Fund
  • Gakim Solomons, SC Ventures
  • Stan Tang, Chairman, Stan Group
  • Steven Yu, CEO, Ant Bank

NEM Ventures Strategically Invests in Cyclebit, a Company that Provides Tools for Accepting Cryptocurrency and Fiat Payments to Online and In-Store Merchants

NEM Ventures, the venture capital and investment division of the NEM blockchain ecosystem, one of the world’s largest cryptocurrency platforms with a market cap of more than $300 million (at time of writing), has reportedly made an investment in Cyclebit, a provider of “simple, affordable and robust tools” for retail consumers to accept cryptocurrency and fiat payments for in-store, online and “on-the-go” purchases.

Dave Hodgson, director and co-founder of NEM Ventures, stated:

“Cyclebit is already an established player in the crypto and fiat payments space, and we are thrilled to make a strategic investment in this project at a time of major growth for the organization. With an existing global presence and the potential to help bring crypto to the mainstream, we are aligned in our vision to bring crypto to mass adoption.”

As mentioned in a press release shared with CrowdFund Insider, Cyclebit aims to bridge the gap in the road to the mainstream adoption of digital assets by teaming up with brick-and-mortar retailers and merchants throughout the world and setting up point of sale (PoS) terminals that accept cryptocurrency payments. By doing so, Cyclebit will be helping to bridge the crucial gap between traditional businesses and consumers who are eager to perform transactions using  digital currencies.

Some Canadian residents are already paying municipal taxes in cryptocurrencies and fiat. There are more than 200,000 PoS terminals at present, and the platform has the capacity to support “millions of transactions” each month.

The Cyclebit wallet is expected to launch early next year in collaboration with Tangem, the creator of “the first smart banknote” for crypto-assets. The wallet will function as a universal wallet for “all fiat and cryptocurrencies, enabling users to load their credit cards onto Cyclebit,” the release noted.

Users will have the option of managing their funds through one simple wallet, while being able to keep their assets secure in cold, or offline, storage.

The release said that by “linking, customers, merchants, exchanges, and coin issuers, Cyclebit fosters a community of users globally.” Headquartered  in Canada, Cyclebit will be launching it services in Japan, Korea, Germany, Italy and the UAE.

As explained in the announcement, Cyclebit allows users to make payments with NEM’s native digital currency, XEM (since last year). The strategic partnership investment aims to further support the growth and development of NEM’s proprietary Catapult technology, which is expected to launch early next year.

The investment will provide the ability to expand the current global service in North America, which will allow consumers to pay in XEM and Catapult tokens at retail outlets in many different countries.

Sameer Pirani, CEO at Cyclebit, remarked:

“The upcoming Catapult launch will undoubtedly make waves in the industry, and we are excited to be partnering with NEM Ventures at this monumental time. This investment makes it possible to continue scaling our PoS terminals globally, and we can’t wait to continue diversifying our user base with a major industry player by our side.”

As the VC and investments division of the NEM blockchain platform, NEM Ventures supports the development and adoption of the NEM technology via strategic investment in “meaningful, high-tech projects,” the release stated.

NEM Ventures aims to invest in projects which appear to have long-term potential and the “desire to promote the growth of the [larger] blockchain ecosystem.”