There’s no shortage of fintech news, and crypto news in particular practically bumps into you in the hallway.
Financial companies would like blockchain to be boring—to be as far away from the wild West associated with crypto as possible. And they’re working hard to make sure that transition actually happens as a panel this week amply highlighted.
The panel was moderated by a former federal prosecutor and ex-head of the U.S. Immigration and Customs Enforcement agency, Julie Myers Wood. It took place at Rise, Barclay’s fintech project that has locations in six cities, including New York. The purpose of the event was the launch of the fintech FinCrime Exchange (FFE) in the U.S. (The FFE already exists in Britain)
The event was notable for two reasons. First, U.S. law enforcement—not just securities and financial regulators—have a clear understanding that drug smugglers, money launderers, and human traffickers are trying to use fintech, particularly crypto exchanges and platform lenders.
“What kind of criminal organization wants to take advantage of your business?” Angel Melendez, panelist and the special agent in charge of ICE Homeland Security Investigations in New York City asked. “All of them.”
Some in the audience chuckled, but Melendez certainly wasn’t joking and made the point that the exact things fintech proudly trumpets as innovations—secure, untraceable money transfers in crypto or quick and easy customer onboarding for online investment and lending services—are uniquely attractive to criminals.
And that attractiveness to criminals is the reason the FFE exists: Fintech companies can share problem they have encountered and the fixes they have put in place. Customer information is never shared, however, FFE says. There’s a private Slack channel (of course), and there are panels and cocktail hours.
All of this is basic stuff industry organizations do across the economy. But FFE is a bit more interesting in the context of Melendez’s warning. Big fintechs in the U.S. like SoFi and Square actively want to be regulated by the federal government because of the advantages of a national charter. But even bigger, more highly regulated financial companies have their own self-regulatory bodies. Indeed, self-regulation is a crucial part of how U.S. financial regulation is structured.
You can see how FFE might fit in here and why the fintech industry would have an interest in talking about how global and how successful it is. As fintech and crypto keep trying to get more and more boring, the industry will have an advocate for self-regulation, and they hope, evidence that it works.
SoftBank ‘s Vision Fund is looking to raise $4 billion, Reuters reports. The purpose of the debt offering is to allow the fund to do deals ahead of yet-to-be delivered commitments.
Square’s stock dove after it beat revenue and earnings estimates but gave disappointing margin guidance, Barron’s Tae Kim reports.
The Chinese government has given American Express approval to set up card-clearing services in the country, the WSJ reports. Timed ahead of the summit between the two countries leaders, it’s a small bit of fintech diplomacy.
“Bitmain rushes to deploy 90,000 Antminer S9 miners in Xinjiang as bitcoin cash hard fork looms.”