America’s oldest bank gets into crypto
Photo: BNY Melon

America’s oldest bank gets into crypto

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Good morning! BNY Mellon is getting into crypto. But as you might expect from America’s oldest bank, it’s not rushing into it.

Slow and steady wins the race

Caroline Butler joined the Bank of New York Mellon as CEO of custody services two years ago to ensure that the assets of the country’s oldest bank’s clients are safe and secure.

That job could soon become much more challenging: The bank announced it will start holding crypto assets for select clients, marking a major move by a traditional financial services giant into the controversial crypto market.

Institutional investors still want in on crypto despite the crypto crash, prompting the bank’s entrance into the space. Butler told Protocol’s Ben Pimentel that the bank has been looking for a way into digital assets for two years, with the spike in demand being the catalyst to actually do it.

  • Because the “vast majority” of BNY’s clients were already invested in digital assets in some way, and no other traditional institution offered anything similar, becoming a one-stop shop made sense, Butler said.
  • “[I]t was very important to be able to go to a provider who could offer services across the different assets in their investment portfolio, whether it was traditional assets or a combo of digital assets,” she told Ben.

BNY’s move doesn’t come without challenges. Butler said heightened cybersecurity is crucial to keeping the bank’s digital assets safe: “[U]nlike the traditional space, if you lose the keys to digital assets, you effectively lose the assets.”

  • Within security, Butler is focused on wallet management and infrastructure. Interoperability “across the digital and the traditional space” is also something the bank wants to get right. “It goes back to that client experience,” she said.

Entering this space can’t be rushed. Though the fintech industry criticized traditional banks for their pace, BNY is going slower to be “measured and purposeful, bringing our capabilities to market in a very disciplined form.”

  • And despite the reluctance from traditional banks, Butler said BNY’s institutional clients need a safe place to test the crypto waters. “They’re needing our institutional-grade standards to come into this market to help mature it in a safe and responsible way.”

Read more: How Caroline Butler is helping America’s oldest bank dabble in crypto.

Save the whales

The offshore wind industry may be threatening the survival of one of the most endangered whale species on Earth, Protocol’s Lisa Martine Jenkins writes.

Boat traffic and offshore infrastructure need to skyrocket in order to reach the Biden administration’s goal of developing 30 gigawatts of offshore wind by 2030.

  • But North Atlantic right whales are facing an “unusual mortality event,” which the National Oceanic and Atmospheric Administration largely attributed to “rope entanglements or vessel strikes” in a recent report.
  • Underwater noise pollution from construction can also damage whales' hearing and behavior.

Startups are working to find solutions. Vineyard Wind, an offshore wind developer, and Greentown Labs, a startup incubator, created an accelerator program for companies developing tech to protect marine life.

  • Some of the innovations include aerial drone systems for sea inspection and night-vision cameras that can be customized to work on offshore turbines.

The government wants to help, too. The Department of Energy and the state of Maryland have funded marine mammal research group SMRU Consulting for its work on a “coastal acoustic buoy for offshore wind.”

  • The buoys detect high-frequency whale calls to pinpoint their location, allowing an offshore wind developer to know when it should slow or stop construction.

The risk to right whales shows the need to balance mitigating climate change and conservation — and how people are trying to use tech to keep the scales stable. Whether these efforts are enough remains to be seen.

Read more: A version of this story appeared in Protocol’s Climate newsletter. Sign up here.

The itch for something new

Brad Olson spent six years growing Peloton’s subscription business into a common household product. Now he wants to “do it all over again.” Last month, Olson became CEO of Sollis Health, a subscription-based concierge health care startup that gives members 24/7 access to doctors, ER, and urgent care with no wait times.

Olson is a first-time CEO, but his last two roles at Peloton prepared him “uniquely” to run Sollis, he told me in an interview.

  • Olson served as chief business officer and chief membership officer in his time with the company, giving him skills such as B2B sales, program management, and cost management.
  • He also learned how to grow a subscription business: While at Peloton, Olson helped expand its membership by 100 times.

Leaving Peloton was less about Peloton itself, and more about scratching “the itch to join an earlier-stage company,” Olson said.

  • “There’s been so much growth in concierge medicine, and Sollis to date is the only player in the market that is addressing urgent care and emergency care,” Olson said. “So in a similar way, the co-founders here at Sollis created a new category — just like the founders at Peloton.”
  • And Olson has seen firsthand that the U.S. health care system needs help. “I live with multiple sclerosis,” he said. “I’ve seen the best and the worst that the U.S. health care system has to offer, and urgent and emergency care can be terrifying, especially for folks that have underlying conditions.”

But first-mover advantage doesn’t last forever, he told me. Keeping up a successful growth subscription-based business requires putting members first. “If you make your members your North Star, and put them at the center of every decision, you can’t go too wrong,” he said. “It’s this sort of virtuous cycle: If it’s good for the members, it's good for the business, it's good for the employees, because it presents growth and opportunity.”

Read more: How Brad Olson decided to leave Peloton.

A MESSAGE FROM CAPITAL ONE SOFTWARE

Many business leaders aren’t sure where to begin when it comes to migrating to the cloud. To help organizations adapt to this revolution, Capital One launched Capital One Software, a new enterprise B2B software business focused on providing cloud and data management solutions.

Learn more

People are talking

Transportation secretary Pete Buttigieg said EV adoption will require drivers to accept shorter ranges:

  • “[W]e tend to buy cars for our longest trips, not our most frequent trips. It will take a while for us to close the gap between the range we think we need and the range we actually need.”

Investor Chris Sacca said that climate investing is “recession proof”:

  • “[T]he reality that clean energy and clean products are reaching price parity are just massive tailwinds that we’re trying to keep up with, frankly.”

SAP has reached a “tipping point” in cloud growth and profit, CEO Christian Klein said:

  • “Two years ago actually, we started the transformation of SAP where we said, ‘Hey, we want to move our portfolio completely to the cloud, because this is where we can serve our customers best.’”

The iPhone will switch to USB-C as a result of a recent EU ruling, Apple’s Greg Joswiak said, but he doesn’t sound thrilled about it:

  • “Obviously we’ll have to comply, we have no choice.”

Making moves

AWS executive Pravin Raj is leaving Amazon. Raj is one of several of the cloud giant's top leaders named in a discrimination and harassment lawsuit by a former employee.

Alexander Höptner is stepping down as CEO of crypto exchange BitMex after around two years with the company. Stephan Lutz has been appointed as interim CEO.

EV startup Faraday will cut salaries by 25% to preserve cash. The cuts, lasting from Nov. 1 to the end of the year, come as the company seeks funding to release its first car.

Memory chipmaker SK Hynix is cutting investment by more than 50% due to "unprecedented deterioration" in demand for its hardware.

In other news

Apple said it would make new investments in wind and solar projects in Europe, as well as call on its suppliers to decarbonize production of its products.

Elon Musk plans to close the Twitter deal by Friday, complying with a Delaware court ruling, according to Reuters.

Amazon is testing Venmo. All U.S. customers will be able to use the service by Black Friday.

India fined Google $113 million for anticompetitive practices for restricting app developers in the country from using third-party billing or payment processing services.

Twitter is losing some of its heavy-hitter users. At least, if you count heavy hitters as those who account for less than 10% of monthly overall users but generate 90% of all tweets and half of global revenue.

Alphabet’s earnings fell short of Wall Street’s expectations as the digital ad industry continues trending downward.

Microsoft reported its slowest revenue growth in five years. Weakening device demand hasn’t helped, but even cloud revenue was lower than anticipated.

Amazon warehouse workers in Southern California abandoned their plans for a union election following the labor union’s defeat in New York last week.

Uber drivers in New Zealand won a class-action case declaring them employees rather than independent contractors.

The celebrity deepfake promo

Deepfakes of anyone from Tom Cruise to Elon Musk have started to make their way into advertising. While some of the ads are parodies, the continued evolution of deepfake software could create a legal gray area as celebrities navigate new forms of unauthorized use of their likeness. “We’re having a hard enough time with fake information,” one expert told The Wall Street Journal. “Now we have deepfakes, which look ever more convincing.”

A MESSAGE FROM CAPITAL ONE SOFTWARE

The flexibility of the cloud helps companies like Capital One unlock access to their data with performance that can scale instantly. But this flexibility and scale can also create a unique challenge for organizations and users who are not proficient in cloud optimization.

Learn more

Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

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