August 17, 2022
Illustration: Christopher T. Fong/Protocol
Good morning, and welcome to Protocol Fintech. This Wednesday: picking through the crypto market’s trash and treasure, a mystery at MFT, and Revolut’s big bet on the U.S.
Want to work at Meta Financial Technologies? Good luck finding a job, literally. Previously, you could see openings at the financial unit under its old name of Novi, but a recent redesign of Meta’s careers website seems to have wiped the fintech product group off the list. With some Google searching, I found a few dozen listings. A spokesperson for MFT didn’t respond to my inquiry about the change. But here’s one more clue: Stephane Kasriel, the head of MFT, recently broadened his duties to include commerce as well as payments and crypto, according to his LinkedIn profile. Heard anything more about what’s going on at MFT? Drop me a line.— Owen Thomas (email | twitter)
After a severe crash, consolidation is the next phase for crypto. Strong players like FTX, Ripple and Binance are looking to pick off flailing competitors in M&A deals that have suddenly become dramatically more affordable. But the crypto crash is also revealing which players have questionably wobbly businesses. Merger deals in this environment can be tricky — even messy.
Downturns mean great deals. The crash wiped out roughly $2 trillion in value and caused the collapse of major crypto players like Terraform Labs, Three Arrows Capital, Celsius and Voyager Digital. It would seem like a perfect time to go shopping.
This is a “buyer beware” market. Some acquisition targets found themselves abandoned at the altar after would-be buyers took a closer look at what they’re buying, Moor Insights & Strategy analyst Melody Brue told Protocol.
“Crypto in M&A is like porcupines mating right now,” Logan Allin, managing partner at Fin Capital, told Protocol. It’s sometimes hard to tell if a deal is “going to happen or not.” Shoppers must deal with “asset complexity,” volatility and regulatory issues. Crypto will likely consolidate, he said. But would-be buyers are treading carefully, making sure they don’t end up with “toxic assets” and “a ton of regrets.”— Benjamin Pimentel (email | twitter)
How cybercrime is going small time: Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide.
The Federal Reserve issued guidance for banks working with crypto firms. The notice says banks must notify the Fed before engaging in any new crypto-related business, similar to warnings the FDIC and OCC have sent the banks they oversee. Traditional banks working with crypto firms are coming under greater scrutiny following the bankruptcies of Celsius and Voyager.
But there is backlash to that banking backlash. As progressive Sen. Elizabeth Warren pushes regulators to crack down on crypto banking activities, Republican Sen. Pat Toomey is questioning whether the FDIC is improperly deterring banks from getting involved with digital assets.
Genesis CEO Michael Moro is stepping down and the firm is cutting 20% of its employees. The reported layoffs come as the crypto brokerage, part of the Digital Currency Group conglomerate, has a $1.2 billion claim against Three Arrows Capital, which is undergoing liquidation.
Bitcoin miners are racking up big losses. The three largest U.S. publicly traded bitcoin mining firms lost more than $1 billion last quarter, driven by impairment charges as cryptocurrency prices sank.
WebBank expanded its fintech card-issuing options with an American Express partnership. The deal gives WebBank a third option to help fintechs launch cards, adding to existing deals with the Visa and Mastercard networks.
“Crypto nomads” are settling down for winter. Blockchain professionals are sticking to cities like New York and London, as those financial hubs rebound and pandemic restrictions and falling crypto values have made the nomadic style of living promoted by many in the industry impractical.
You think Twitter crypto bots are a problem? Try LinkedIn fakes. Binance CEO Changpeng Zhao says most of the people claiming to work for him on the professional network are scammers. “I wished LinkedIn has a feature to let the company verify people,” he wrote. Do your research, I guess?
Wells Fargo is rethinking its home-loans business. “We’re not interested in being extraordinarily large in the mortgage business just for the sake of being in the mortgage business,” CEO Charlie Scharftold analysts recently.Revolut is sticking to its bet on the American banking market and continuing to hire despite other neobanks’ stumbles. “I think you'll start seeing some significant growth towards the end of the year,” U.S. general manager Yuval Rechtertold Verdict.
How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it.
Thanks for reading — see you tomorrow!