June 13, 2022
Photo: RODNAE Productions/Pexels
Good morning, and welcome to Protocol Fintech. This Monday: the obstacles to bitcoin in your 401(k), unrest at Coinbase and Grayscale’s battle plan.
The question isn’t whether we’re in crypto winter, it’s whether your down vest will be enough to get you through it. Unless you’re Michael Sonnenshein of Grayscale, who told my colleague Ben Pimentel that it’s an open question. Mike Novogratz of Galaxy Digital, who now says his luna tattoo is a reminder to avoid hubris, is more bearish, saying the crypto markets may have to wait until the fourth quarter for the Fed to ease up.— Owen Thomas (email | twitter)
You’d think the last thing people would want to bet their retirements on now is crypto, given the plunge in digital asset prices. The Department of Labor has made its opinion clear, telling plan providers in March to exercise “extreme care” before including crypto in their retirement plans. But Fidelity, a big player in the 401(k) world, and ForUsAll, a roughly 10-year-old startup, are plunging ahead. ForUsAll actually sued the department over its guidance.
The Department of Labor didn’t mince words in its crypto warning. Cryptocurrencies, it said, pose “significant risks of fraud, theft and loss.” And that was before the UST meltdown!
Fidelity and ForUsAll argue the agency overstepped in warning of investigations. Both are challenging the guidance.
Regulatory clarity may take some time. The new Lummis-Gillibrand crypto bill only indirectly addresses crypto in retirement accounts.
The arguments about crypto in retirement plans reflect broader disagreements about the asset class. Ric Edelman, financial adviser and author of “The Truth About Crypto,” compared bitcoin to the Model T in an interview with MarketWatch, and decried the Department of Labor’s “unjustified paternalistic attitude.” But whether you’re a bitcoin maxi or a crypto skeptic may be beside the point. As Wendy Von Wald, fiduciary product manager at Travelers, pointed out, “fiduciaries must act in the best interests of plan participants.” Until it’s clear that offering crypto fits that bill, the legal uncertainty may be enough to keep most of the retirement world from following Fidelity and ForUsAll down the crypto path.
Learn about a new, first-of-its-kind service launched on the Stellar network bridging the gap between the physical and digital world. It will pave the way for blockchain as a tool to further financial inclusion by creating fluidity for moving cash to crypto, so more people benefit from the digital economy.
On Protocol: The CFPB is probing “employer-driven debt,” consumer debt incurred at work to pay for required gear and training. The inquiry comes at a time when companies are increasingly offering different financing products to their employees, often in partnership with fintech companies.
Mastercard is bringing its networks to NFTs. In an expansion into the Web3 space, the payments giant partnered with Immutable X, Candy Digital, The Sandbox, Mintable, Spring, Nifty Gateway and MoonPay to let consumers use their Mastercard to buy NFTs.
Also on Protocol: Grayscale is ready for a potential legal brawl with the SEC over its bitcoin spot ETF application, CEO Michael Sonnenshein told Protocol. With a new high-profile legal hire, Grayscale is preparing for any type of outcome of the application.
The Stellar-MoneyGram deal could help get your money into crypto. Consumers without a bank account or credit card can now bring fiat to a MoneyGram location to convert it to crypto, and vice versa.
Revolut is making USD transfers to the U.K. fee-free for businesses. Business customers can now receive USD payments up to $1 million via the Automated Clearing House Network, a move to enable foreign transfers without using SWIFT, though that network will still be an option.
Employees are pushing Coinbase to remove three top leaders over actions "that have led to questionable results," according to a now-deleted petition that was first published on Mirror.xyz. CEO Brian Armstrong said Friday the demands were "really dumb on multiple levels."
The petition, titled "Operation Revive COIN," called for Chief Operating Officer Emilie Choi, Chief Product Officer Surojit Chatterjee and Chief People Officer LJ Brock to be fired from Coinbase. Employees listed eight plans they said were carried out under those executives' direction, including Coinbase's struggling NFT marketplace; the decision to rescind new job offers; and a since-reversed push to hire for thousands of roles "despite the fact that it is an unsustainable plan and is contrary to the wisdom of the crypto industry."
Employees also alleged a "generally apathetic and sometimes condescending attitude" from the three executives and wrote that the company has been unable to put out "any higher or better quality products and services" despite hiring more employees.
Read the full story on Protocol.com.— Sarah Roach (email | twitter)
The Fintech South conference is starting on Tuesday. The two-day event will be held in Atlanta at the Georgia World Congress Center. Speakers include EY partner Jamila Abston, Global Payments President Cameron Bready, and Apple’s Cherie Fuzzell. (That name seems familiar.)
The Generations 2022 conference also begins Tuesday. The two-day conference will be held in Charlotte, North Carolina, featuring speakers from Credit Karma, The Clearing House, Oracle and others.
The Invest 2022 conference is starting on Thursday. The two-day conference will be held at the Hilton Midtown in New York City, and will feature speakers from Fidelity, Citibank, J.P. Morgan and others.
On Stellar, wallets and fintechs can enable their users to easily convert digital assets to cash or cash to digital assets across thousands of participating locations in a growing list of countries around the world. Get started.
Thanks for reading — see you tomorrow!