Gavin Newsom, governor of California, during The Texas Tribune Festival in Austin, Texas, US, on Saturday, Sept. 24, 2022. In its thirteenth year, the Festival features more than 300 speakers from the worlds of politics, public policy, technology and media. Photographer: Jordan Vonderhaar/Bloomberg via Getty Images
Photo: Jordan Vonderhaar/Bloomberg via Getty Images

California sends crypto a mixed message

Protocol Fintech

Good morning, and welcome to Protocol Fintech. This Tuesday: Visa’s own goal, crypto in California, and Do Kwon’s whereabouts.

Off the chain

It wasn’t that long ago when gamification in finance was frowned on, but Visa’s giving it a go anyway with a new version of its Financial Soccer video game. Or is it Financial Football? Apparently that’s what Visa called the soccer game in a press release sent to The problem is that Visa also has a Financial Football game for the American sport. It gets even more confusing in the Spanish-language versions of the games, both of which are called Futbol Financiero. Goooool!

— Owen Thomas (email | twitter)

Is crypto golden in California?

California gave crypto a gift — then followed it up with a warning.

Crypto scored a huge win after Gov. Gavin Newsom vetoed a bill that would have required digital asset companies to get a state license. But three days later, the Golden State sent a strong message to crypto companies that there are rules for companies that handle customers’ money, and that regulators will go after anyone who ignores them.

Suddenly, Newsom is seen as a champion of crypto. The crypto licensing proposal enjoyed overwhelming support in the California legislature. Newsom shot it down, quickly earning praise in the cryptoverse.

  • Making crypto companies obtain licenses was a popular idea in the wake of a market crash that caused consumers to lose their savings. That’s why the Blockchain Association’s Jake Chervinsky praised Newsom’s “guts” for vetoing the bill, which the industry warned would cause more problems than it solved.
  • Chamber of Progress CEO Adam Kovacevich said the veto gives California “a chance to take a less rushed, more inclusive approach to developing crypto regulations,” adding that “there’s a huge opportunity in the next few years for California and other states to get crypto regulation right.”
  • Miles Jennings, general counsel of a16z crypto, celebrated Newsom’s “strong show of support for the Web3 industry,” declaring, “He’s given us a great opportunity to help CA lead Web3. Time to make it happen!”

Within days, California’s financial watchdog fired a warning shot. Any hope that the Newsom veto meant crypto would generally have an easier time in California got tamped down considerably with news that a state regulator had joined a multistate offensive against a popular and lucrative segment of the crypto industry.

  • The California Department of Financial Protection and Innovation joined New York and six other states in taking legal action against crypto lender Nexo, which they accused of allowing consumers to deposit crypto assets in exchange for interest as high as 36% without registering its products as securities and providing material information to customers.
  • DFPI commissioner Clothilde Hewlett said the “aggressive enforcement efforts against unregistered interest-bearing cryptocurrency accounts” are aimed at enforcing “investor protections under the law, including adequate disclosure of the risk involved.”
  • New York attorney general Letitia James, whose office accused Nexo of misleading investors, said, “Cryptocurrency platforms are not exceptional; they must register to operate just like other investment platforms.”

In vetoing the crypto licensing bill, Newsom said that “a more flexible approach is needed to ensure regulatory oversight.” The state’s main financial regulator just sent the message that they don’t need a licensing law to go after bad actors in crypto.

— Benjamin Pimentel (email | twitter)


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On the money

FTX has won the auction for Voyager's assets. Sam Bankman-Fried’s crypto exchange had a bid valued at $1.42 billion for the bankrupt crypto lender.

Robinhood released a beta version of its Web3 non-custodial wallet. The Robinhood Wallet is available to the first 10,000 users who signed up for a testing period in May.

Bitcoin got a price boost. The $20,000 value bitcoin eclipsed Tuesday is its highest level in more than a week, but the world's largest cryptocurrency has been struggling to break out of the $18,000 to $25,000 range for months. In the meantime, bitcoin's narrative keeps shifting.

JPMorgan and DoorDash are teaming up on a credit card. The card, which is the first for DoorDash, will operate on Mastercard's network, expanding on existing relationships between the three companies.

Nubank has 70 million clients. The Brazil-based company, Latin America's largest fintech, said it reached the milestone Monday.


Thoma Bravo co-founder Orlando Bravo isn’t thrilled with crypto ethics, despite investing in FTX and a handful of other companies. “I’ve gotten to know that world a little bit more, and some of the business practices don’t rise to the level of ethics that we’re all used to in private equity with your investors and your customers and your community, and that has been a bit disappointing,” he told the Financial Times.

Do Kwon is “making zero effort to hide,” the Terraform Labs co-founder tweeted, breaking a nine-day period of silence on the social network. Kwon is the subject of an Interpol red notice requested by South Korean prosecutors.

Deal flow

Opto Investments raised $145 million in a series A funding round. The private-capital investment service was founded by Palantir co-founder Joe Lonsdale and investor Mark Machin.

San Francisco fraud detection startup Sardine raised $51.5 million in a series B round. A16z led the fundraising round, while Nyca Partners, Google Ventures, Uniswap Labs Ventures, and several others participated.

Pie Insurance raised $315 million in a series D round co-led by Centerbridge Partners and Allianz X. The D.C. firm offers workers’ compensation insurance to SMBs.

FTX is reportedly raising $1 billion in a flat round that would maintain the company’s valuation at $32 billion. The firm is looking to fund more acquisitions, according to reports.

Indian insurtech Zopper raised $75 million in a series C round led by Creaegis. The company has raised $96 million to date.

London-based Sequence raised $19 million in a seed round led by a16z and with participation from Salesforce Ventures, Fin Capital, 9Yards, and more. The company manages billing and payments for businesses.

Miami-based rental property management software company DoorLoop raised $20 million in a series A funding round. The round was led by Alpine Software Group.


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Thanks for reading — see you tomorrow!

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