March 14, 2022
Photo: Doug Mills-Pool/Getty Images
Good morning, and welcome to Protocol Fintech. This Monday: crypto’s fog of war, Yuga Labs’ CryptoPunks takeover, and the latest in SEC v. Ripple.
I’ve been thinking about how a lot of companies you don’t think of as financial in nature really are fintech. Airbnb, for example: Sure, it’s a lodging marketplace, but its business is really about moving money from guest to host, often across borders. I noticed that Airbnb’s payments business paid a $91,172.29 fine to OFAC in January for violating sanctions against Cuba. That’s why the notion of using fake Airbnb stays as a way to raise funds for Ukraine relief, while well-meaning, is kind of alarming. People booking stays in apartments that don’t exist for trips they don’t plan to take is not the kind of thing regulators love.— Owen Thomas (email | twitter)
Crypto was ready to battle it out over regulations this year. But the industry has been forced to draw up new plans as it wrestles with the fog of the Ukraine war.
The Russian invasion sparked worries about how crypto could be used by authoritarian leaders to thwart U.S. foreign policy. Those fears have eased a bit in the past week, as experts in industry and government pointed out that the blockchain is a terrible place to try to hide money.
But the crypto industry is bracing for the unexpected — and keeping a keen eye on sudden moves in the Capitol — as geopolitical conflict raises the stakes.
Can crypto help Putin and his friends evade sanctions? Next to impossible and certainly impractical, the industry was quick to assert as the war got underway earlier this month.
The war will reshape the crypto conversation. The fast-growing, controversial industry has skirmished with regulators over whether crypto offers enough protections against bad actors.
The crypto regulatory front still looks hazy. The Biden order didn’t settle all the key issues, and has been criticized for being vague on how federal regulators should approach the industry.
Crypto is bracing for new curveballs. Smith maintains that the crypto industry “has a good story to tell.” But the war has created more uncertainty. “We're trying to make sure that there aren't any quick moves.” she said.
— Benjamin Pimentel (email | twitter)A version of this story first appeared on Protocol.com. Read it here.
As one of the top super apps in the world, Revolut is always looking to launch new products and improve their existing offerings. Revolut used Fireblocks to handle the heavy lifting on the tech side so they could focus on shipping new products for their 15.5 million users.
On Protocol: The U.K.’s Financial Conduct Authority said none of the crypto ATMs operating in the country were legal. While it didn’t ban the ATMs categorically, it said none of the companies offering them were approved to do so.
The Bank of Israel published draft guidelines for crypto deposits. Banking corporations will be required to conduct a risk assessment, set out policies and clarify the source of money used for transactions related to digital currencies.
Also on Protocol: DiDi wants to pull out of the U.S. stock market, but it can’t list on the Hong Kong Stock Exchange just yet. Chinese regulators said the firm did not meet their security requirements.
The Reserve Bank of India barred Paytm from accepting new customers. The regulator said that the decision came after material supervisory concerns were observed in the bank.
The U.S. Justice Department will investigate financial institutions, including crypto exchanges, that aid in evading Russian sanctions. A new task force was created to pursue investigations relating to institutions helping Russians hide their assets from sanctions.
Bored Ape Yacht Club owners bought CryptoPunks, and it’s all about IP rights. While CryptoPunk owners have been upset about the way Larva Labs has handled IP rights, the acquisition will give “full commercial rights to the NFT holders.”
PayNearMe added Walgreens to its retail cash network. The partnership enables PayNearMe clients’ customers to facilitate cash payments at nearly 9,000 Walgreens stores across the country, putting the network at over 40,000 retail locations nationwide.
The U.S.Department of Labor wants you to think before adding a crypto option to the investment menu of a 401(k) plan. “These investments present significant risks and challenges to participants' retirement accounts, including significant risks of fraud, theft, and loss,” the department said in a statement.
European Central Bank President Christine Lagarde wants to speed up plans for a digital euro, and is confident it’s going to happen. “I think we have to be a little bit ahead of the curve if we can on that front. So I hope we can accelerate the work. I will certainly support that,” she said during an ECB press conference.
The SEC v. Ripple case is making headlines again after a New York district judge denied a motion to strike Ripple’s fair-notice defense. “Today’s order makes it clear there’s a serious question whether the SEC ever provided Ripple with fair notice that its distributions of XRP — since 2013 — would ever be prohibited under the securities law,” Ripple general counsel Stuart Alderotytweeted.
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Expensify’s earnings call is set for Thursday. EXFY’s average estimated EPS is at $0.08, down 86% from last quarter.
GameStop’s earnings are also coming out Thursday. GME’s average estimated EPS is at $0.76, up 155% from last quarter. Investors will likely be keen to hear about the gaming retail company’s progress with its newly launched NFT marketplace.
The Blockchain Africa Conference will start on Thursday. The two-day event will feature blockchain industry speakers from Cardano, Blockchain.com and Binance Africa, among others.
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Thanks for reading — see you tomorrow!