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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The funding drought in fintech is a very well-documented concern. Nevertheless, FinovateEurope 2024 featured more early-stage demoing companies than any of our events to date.
There’s certainly reason to be optimistic about the future of our industry. We’re seeing more innovation and more creativity every time we convene. We’re not only seeing new solutions to emerging problems. We are also getting first-hand accounts of how these solutions are being deployed within financial institutions.
In this eMagazine, we hear from key decision makers at ABN AMRO Bank, BBVA, Raisin, Zurich Insurance Group, and beyond on how they’re adopting technologies and how their customers benefit from them.
Busey Bank has selected CorServ to offer a new credit card program for its commercial clients.
Busey Bank is giving up its Agent Bank program in favor of CorServ’s Account Issuer Program, in which Busey Bank will directly issue credit cards.
CorServ has been offering card issuing services since it launched in 2009.
Illinois-based Busey Bank announced today it has selected card issuer CorServ to power a a modern credit card program for its commercial customers.
Busey Bank has switched from its Agent Bank program, in which a third party financial institution issued the cards, selecting CorServ’s Account Issuer Program, in which Busey Bank will directly issue credit cards to its customers through CorServ’s program. The bank anticipates the move will make its card solution more comprehensive and will improve the interchange, benefitting both the bank and its clients.
“Busey Bank uniquely knows the financial situation and banking needs of our commercial customers,” said Busey Bank EVP and Director of Treasury Management Andy Santangelo. “CorServ’s commercial card program provides us with tools for credit decisioning, options for local servicing, and custom rebates which empower Busey Bank to better serve our commercial customers compared to what National card issuers can offer.”
Busey Bank was founded in 1868 and serves retail and commercial customers across its 80 branch locations in Illinois, Missouri, Florida, and Indiana. In addition to its commercial card service offerings, the bank also offers commercial clients business planning and business online banking tools.
CorServ has been offering card issuing services since it launched in 2009. The fintech currently offers a turnkey credit card issuing service, a direct credit card issuing service, and a payment cards-as-a-service API. Leveraging CorServ’s Account Issuer Program, Busey Bank will offer its commercial customers better credit card products, a self-service card management interface, customizable reports that include including Level 2 and 3 transaction data, virtual cards, employee spend controls, and expense reporting.
CorServ has raised a total of $2.1 million, according to Crunchbase. Last month, the company was selected by Scale Bank to enhance its commercial lending. Additionally, a month earlier, Gorham Savings Bank announced plans to utilize CorServ’s technology to improve its commercial credit card program.
“CorServ’s program gives commercial customers a modern approach to banking with more capabilities for a convenient and simple experience,” said CorServ CEO Anil Goyal. “We are thrilled to partner with Busey Bank to contribute to their legacy of associate excellence, customer service, community involvement, and expanding shareholder value.”
Brazilian fintech and financial services giant Nubank has teamed up with Wise Platform.
Courtesy of the partnership, Wise Platform will power a new global account and international debit card for Nubank.
Wise Platform offers banks, financial institutions, and businesses the ability to leverage its infrastructure to make cheaper, easier payments.
Brazilian fintech Nubank has partnered with Wise Platform to power its global account and international debit card. Wise Platform, Wise’s infrastructure solution for banks, financial institutions, and businesses, now counts more than 85 partners around the world, including Bank Mandiri, Monzo, and Google Pay.
The partnership will power Nubank’s new global account and international debit cards for the fintech’s premium tier, “Ultravioleta,” customers. The collaboration will also enable Nubank customers to hold both U.S. dollars and euros, as well as use their card to spend in local currencies in 200 countries and territories.
“Through this partnership, we’re helping Nubank customers access fast, transparent payments and the ability to easily manage money across currencies,” Wise Platform Global Managing Director Steve Naudé said. “Across the sector, we are seeing a real push from banks and financial institutions to provide their customers with best-in-class international payments services. By working with Wise Platform, banks are able to achieve this in a matter of months or even weeks.”
Wise’s partnership with Nubank represents continued growth for the company in Brazil; Wise reports that it has issued more than one million Wise cards within 15 months of its going live in the country. For its part, Nubank has more than 90 million customers in South America, with more than 85 million in Brazil.
Nubank introduced itself to Finovate audiences in 2016 with its presentation at FinDEVr NewYork. In the years since, the company has grown from a financial services startup to the largest digital bank in Brazil and the second largest financial institution in the country. Late last month, Nubank announced that it has reached the four million customer milestone for its Nubank PJ offering, launched in 2019, which provides solutions for entrepreneurs. This week, the firm’s subsidiary, Nu Colombia, secured a $150 million loan from DFC, the U.S. International Development Finance Corporation, to help expand its services in the country.
Making its Finovate debut as TransferWise in 2013, the company rebranded as Wise in 2021 to reflect its evolution beyond its origins as an innovator in the international money transfer space. Today, the company supports three main lines of business: its global money transfer service and international account; Wise Business, a global business account with features such as mass payouts and multi-user access; and Wise Platform, which enables companies to give their customers easier, cheaper payments by leveraging Wise’s infrastructure. Co-founder Kristo Käärmann is CEO.
As part of the Eastern U.S. prepares to enjoy the total solar eclipse today, fintech enthusiasts can also eclipse the competition with the latest news and updates in the fintech world. Check back for real-time updates on how the fintech landscape evolves this week.
Payments
Business payments and financial platform Airwallexlaunches its Borderless Visa card in Canada.
Mexican BNPL provider Kueskiintroduces in-store mobile payment solution.
Kyriba and Onyx by J.P. Morgan (Onyx) leverage the blockchain to streamline cross-border payments.
Arizona Financial Credit Union (AZFCU) selects NCR Atleos’ ATM as a Service (ATMaaS) to increase operational efficiencies within the self-service banking channel.
The Clearing House’s RTP experienced a record 76 million transactions valued at $42 billion in the first quarter of this year.
Corlyticsreceives investment from Verdane for its compliance technology.
Wealthtech
Investment research platform Teguslaunches its AI chat tool, AskTegus.
Open banking
Open banking powered account-to-account payment infrastructure provider Token.iointroduces new Chief Commercial Officer Ronnie d’Arienzo, new Chief Financial Officer Tatiana Okhotina, and new Chief Operations Officer Tim Corke.
Atto, a credit risk solutions provider based in the U.K., teams up with analytics software firm FICO to bring open banking data into U.K. credit scoring.
This week Finovate Global looks at recent fintech news from Africa’s most populous nation: Nigeria.
Nigerian blockchain network Zone secures investment
Last week in Finovate Global we noted the news that Nigerian blockchain network Zone had raised $8.5 million in seed funding. This week we’re filling in some of the details of the investment – and of the company.
Flourish Ventures and TLcom Capital led the oversubscribed seed funding round for Zone. Also participating in the funding were VC firms Digital Currency Group, Verod-Kepple Africa Ventures, and Alter Global.
Zone split from its parent firm Appzone to become a standalone business – as well as the first regulated blockchain network for payments on the continent – in 2022. Zone’s network facilitates direct transactions between financial service providers without the participation of an intermediary, and automates settlement, reconciliation, and dispute management. Zone’s technology digitizes fiat payments and enables the transition to digital currencies.
Zone co-founder and CEO Obi Emetarom highlighted the fact the Zone was able to secure funding during the current investment drought, calling it a “sign of trust in the Zone brand and investor excitement about the opportunity to redefine payment infrastructure in Africa.”
The company will leverage the new capital to expand its network’s coverage. Zone currently has more than 15 of Africa’s largest banks and fintechs using its network to process payments.
Afreximbank and Sterling Bank Promote Innovation in Supply Chain Financing
A newly announced partnership between African Export-Import Bank (Afreximbank) and Sterling Bank will enable the African financial institution to offer an increasingly popular supply chain financing solution, Payables Finance, in Nigeria. The solution will be branded, Afreximbank Tradelink, and will be made available as part of the Africa Trade Gateway (ATG). ATG provides digital solutions to help businesses access market data, network with buyers and sellers, promote trade payments between African markets in local currencies, and more.
One of the fastest growing trade finance solutions worldwide, Payables Finance helps suppliers access funding by securing early payment on those invoices that have already been approved for payment by corporate buyers. Buyers receive trade credit from suppliers. Suppliers finance their working capital via the early payment they received. The cost of financing is based on the credit rating of the buyers, which can be a significant benefit for smaller suppliers that struggle to secure financing at affordable prices.
“Afreximbank identified supply chain finance as a solution for improving access to trade finance in Africa and embarked on a journey to increase penetration through financial intervention and capacity building,” Afreximbank Global Trade Bank EVP Haytham ElMaayergi said.
Nigeria-based Payments Solution Thepeer Closes Down
Some unfortunate news in the world of Nigerian fintech: Nigeria-based startup Theeper has shut down and is returning all remaining capital to investors. Theeper leverages APIs to give fintechs and other businesses an alternative network where they can promote easy money movement for customers via different solutions they can embed into their apps and websites. The company had hoped to connect digital wallets across 400 fintechs across Africa to facilitate payments.
Thepeeer had secured $2.1 million in seed funding in June 2022. But as the company’s founders acknowledged in a statement earlier this week, Thepeer was struggling to scale and, despite its “unique service” and technology, “the overall acceptance of wallets as a viable payment option didn’t grow as rapidly as we had hoped.”
“A big thank you to our customers, employees past and present, our investors, the tech community and everyone who believed in us and contributed to our journey,” Thepeer co-founders Michael “Trojan” Okoh and Chike Ononye wrote on the company blog. “In our bid to chase the stars, we must realign and focus on what matters.”
Finovate’s African alums: From innovations in lending to authentication
Most of our alums based in Africa made their Finovate debuts at our conference in Capetown, South Africa in 2018. Here’s a look at some of the companies headquartered or founded in Africa that have demoed their technologies on the Finovate stage.
Craft Silicon – Founded in 2010. Headquartered in Nairobi, Kenya. Provides fintech services and consulting to facilitate digital transformation, mobile application development, software engineering, and more.
Drive Revenue – Founded in 2013. Headquartered in Cape Town, South Africa. Provides an enterprise grade cloud accounting solution for the legal profession.
Entersekt – Founded in 2008 in Stellenbosch, South Africa. Provides transaction authentication services to help financial institutions defend themselves against fraudsters.
Lidya – Founded in 2016 in Lagos, Nigeria. Offers digital banking services including a receivables-based loan product.
OUTvest – Founded in 2017. Headquartered in Centurion, South Africa. Offers an evidence-based, hybrid robo advisor that helps individuals build and manage their own investment strategy. Won Best of Show.
truID – Founded in 2017. Headquartered in Johannesburg, South Africa. Offers a data sharing ecosystem to securely share personal financial data between consumers and credit providers.
Yoco Technologies – Founded in 2014. Headquartered in Cape Town, South Africa. Builds tools and offers services to help small businesses get paid, operate more efficiently, and grow.
Here is our look at fintech innovation around the world.
Central and Southern Asia
Central Bank of India (CBI) partnered with Veefin Solutions to support its supply chain finance operations.
Saudi Arabian fintech EdfaPay teammed up with Pakistan-based bookkeeping and accounting app Digikhata.
Sachin Bansal, who co-founded Flipkart, is reportedly looking to raise between $200 million and $400 million for his new startup Navi.
Latin America and the Caribbean
FinTech Magazine looked at the rise of Brazil’s Pix payments system and the challenge it brings to the credit card industry.
Colombian fintech Addi raised $86 million in a round led by Goldman Sachs and Singapore’s GIC.
Fintech Nexus featured Brazilian fintech Nubank and its quest for partners in Mexico.
Asia-Pacific
In-app and in-store financial solutions provider UnaFinancial unveiled a new lending app for customers in the Philippines.
Industry advocacy group Fintech Australian introduced its new CEO Rehan D’Almeida.
The Monetary Authority of Singapore (MAS) launched a new digital platform, Cosmic, to enable FIs to share customer data to help combat money laundering.
Sub-Saharan Africa
Ghanaian fintech Zeepay completed an equity investment round featuring pan-African investors Africa50, Oikocredit, Injaro, Verdant Capital Hybrid Fund, and I&P.
South Africa’s Absa Group encouraged African fintechs to list IPOs on local exchanges.
SC Ventures forged a strategic partnership with NEXT176, the investment arm of Pan-African financial services group, Old Mutual.
Central and Eastern Europe
Digital banking platform N26 launched its Stocks and ETFs trading product in Germany.
New licensing rules in Lithuania will likely reduce the number of cryptocurrency firms operating in the country.
Commerzbank announced updates to its payment platform in Germany to enhance its cross-border payments operations.
Middle East and Northern Africa
Network International and Souhoola teamed up to provide Buy Now Pay Later capability to Networkpay point of sale terminals in Egypt.
UAE-based digital bank Zand Bank partnered with Infosys Finacle Solutions to power its corporate banking operations.
Oman Housing Bank selectedTemenos to modernize its core banking platform.
Most of us have heard the phrase, “If you aren’t paying for the product, you are the product,” meaning the company providing the service you’re using is profiting off your data. But what if you’re both paying for the product and your data is being used for profit? That is what Chase’s new Media Solutions business is aiming for.
Chase announced the launch of Chase Media Solutions earlier this week. The new digital media business aims to connect brands with its 80 million customers by way of customers’ transaction data. While this move will provide consumers with personalized offers and cashback opportunities, it also raises concerns about data privacy and consumer consent.
Chase Media Solutions will offer a new stream of revenue for the bank. By leveraging customer transaction history, Chase can offer highly targeted advertising opportunities to brands, generating revenue from both consumers and advertisers. And while consumers are promised some value, such as cashback and personalized offers (if you consider personalized offers valuable), the new launch raises ethical questions about whether banks should be profiting off consumer data in this way. This is especially a concern when, in many cases, consumers are already paying for the bank’s services.
So what is missing from Chase Media Solutions? One of the key issues with the launch that was notably left out of the announcement is availablility of an opt-out option for consumers. Traditional media platforms, such as Facebook, allow users to choose whether to share their data for targeted advertising. Chase, on the other hand, did not mention offering the ability for consumers to opt out of having their data used.
This raises questions about privacy and whether consumers are fully aware of how their data is being used. As the U.S. prepares to enter a new era of open banking, Chase’s stance on who owns customer data becomes clear. By seeking to profit from customer data, the bank is asserting its belief that consumer data ultimately belongs to the bank.
Part of the reason Chase’s launch of a media business is so notable is because it is the first bank to make the move. This begs the question– why haven’t other banks launched similar initiatives? One reason could be the complexity and sensitivity of consumer data. Chase didn’t mention whether it plans to tokenize customer data, but even if it does, using customer data for advertising purposes could be seen as a breach of trust. Additionally, banks may be concerned about drawing attention from regulators, especially in light of increasing scrutiny over data privacy and security. And if you add in the uncertainty around pending open banking regulation, starting a media business like this is a bit risky. The launch of Chase Media Solutions is a bold move.
Want to dive into the latest trends and discussions in the fintech world? Check out the conversations we’ve curated in these four videos recorded at last month’s FinovateEurope conference. From the future of payments to the role of banks in embedded finance, these videos offer valuable insights into some of the industry’s most pressing topics.
Hear from IFX Payments’ Head of Operations Stephen Hutchinson on changes in the payments scene, Ericsson’s Head of Mobile Financial Services Solutions & Strategy Ville Sointu on the future of CBDCs in Europe, Innovate Finance’s CEO Janine Hirt on embedded finance, and Harrington Star Group’s Co-Founder & Chief Customer Officer Nadia Edwards-Dashti on how fintech is engaging with DEI.
Payments in 2024: New challenges, regulations, and innovation
The future of CBDCs in Europe: What does the ECB have in store?
Embedded finance and the role of banks in its future
Driving positive changes in fintech: How is the industry engaging with DEI?
Banking-as-a-Service provider Finzly launched Account Galaxy, a new embedded banking solution.
Account Galaxy allows non-banks and fintechs to launch virtual accounts with real-time transaction monitoring.
The virtual accounts exist alongside an organization’s current infrastructure within what Finzly calls a “sidecar core.”
Account Galaxy is the name of the newest solution from Finzly. The Banking-as-a-Service (BaaS) solutions provider unveiled the new embedded banking solution in an announcement today that highlights how Account Galaxy can help banks participate in embedded banking.
Account Galaxy offers two main use cases to facilitate BaaS functionality: advanced payment processing and flexible accounting capabilities. These capabilities offer non-banks and fintechs virtual accounts where transactions can be monitored in real-time. The accounts not only provide reduced compliance risk, but also offer enhanced speed. Additionally, Account Galaxy helps small-to-mid-size banks attract commercial clients by embedding services into ERP, accounts receivables, and payables in an automated way.
“Embedded banking will have a significant impact on how banking services are provided to business and consumers,” said Datos Insights Strategic Advisor Enrico Camerinelli. “Providing tools to empower banks of all sizes to participate in this emerging industry will lead to greater innovation and ultimately better services for all.”
Account Galaxy’s virtual accounts are supported by a virtual ledger, enabling them to exist alongside an organization’s current infrastructure within what Finzly calls a “sidecar core.” This setup prevents new accounts from overburdening the organization’s existing systems.
“With Account Galaxy, banks can cost-effectively enable the integration of banking services into corporate systems and non-bank platforms, unlocking new opportunities for growth and innovation,” said Finzly founder and CEO Booshan Rengachari.
Finzly’s flagship offering, Finzly OS, enables clients to launch a modern bank from scratch. The company’s API connects to all U.S. payment rails, including Fed ACH, Fedwire, RTP, SWIFT, and FedNow. Founded in 2012 under the name SwapsTech, the North Carolina-based company recently landed $10 million in funding in a Series A round led by TZP Group.
Finzly most recently demoed at FinovateSpring 2023, and has taken home Best of Show honors for its demos at FinovateFall 2020 and FinovateSpring 2020. By the way, we’re still accepting applications from companies interested in demoing at our upcoming conferece, FinovateSpring 2024. Take a look at the event and find out more about what it takes to demo.
Digital analytics platform Quantum Metric released its new Gen AI-powered session summarization solution, powered by Google Cloud’s Gemini Pro.
The new offering will help users manage customer session replays faster and more efficiently.
Quantum Metric won Best of Show in its Finovate debut at our all-digital FinovateEurope conference in 2021.
Digital analytics platform Quantum Metricannounced the release of a suite of new solutions to help organizations better listen and respond to the needs of their customers. Chief among these new offerings is Felix AI, the company’s new Gen AI-powered session summarization solution, powered by Google Cloud’s Gemini Pro.
Session summarization helps enhance the session replay process. Session replays are a critical tool in reviewing and refining the customer experience. But they tend to be both complex and time consuming. Leveraging Gemini Pro, Felix AI summarizes sessions in seconds to capture the exact experience of the customer. The technology simplifies digital customer listening by instantly quantifying session information. Felix AI is then able to ascertain the significance of each issue, as well as its potential impact on key business metrics. The solution also enables users to examine the details of individual customer experiences by asking clarifying questions, for example, about specific campaigns the customer has participated in.
Via API, Felix AI can be directly integrated into VoC feedback received from text, email, as well as social platforms like Slack. The solution can also provide role-based summaries to help call center agents quickly understand the customer’s concern before they’ve expressed it.
“In the past, our focus was transactional. How do we help the customer to make a purchase, book a flight, or open an account,” Quantum Metric founder and CEO Mario Ciabarra said. “The relationships we build with customers today are much more complex and span an entire lifecycle. To succeed, digital organizations need tools like Felix AI to simplify how they listen to their customers, and tools like Interactions and User Analytics to listen at scale and across their entire customer lifecycle. This is the beginning of a new generation of digital analytics tools and we can’t wait to see what our digital organizations can do to further the standards for a great digital customer experience.”
In addition to Felix AI, Quantum Metric also announced three other components of its spring release. These solutions are Interactions, which provides tools to help marketers and UX professional optimize page layout and content, and a pair of analytics solutions: User Analytics and Lightning Analytics. User Analytics provides new data visualizations such as retention and churn to interpret user behavior over time. Lightning Analytics lets users monitor, diagnose, and optimize workflows and apps built on Salesforce Lightning.
Founded in 2015, Quantum Metric is headquartered in Colorado Springs, Colorado. The company won Best of Show in its Finovate debut at our all-digital European fintech conference in 2021. Quantum Metric returned later that year to demo its technology at our all-digital FinovateSpring event. The company has raised $251 million in funding according to Crunchbase. Uncorrelated Ventures and Endeavor Catalyst are among the firm’s investors.
Nuvei has agreed to be acquired by Advent International, which plans to take Nuvei private in an all-cash deal valued at around $6.3 billion.
Nuvei originally went public in 2020 and has a current market capitalization of $6.08 billion.
The deal is expected to close in late 2024 or early 2025.
Payment acceptance technology provider Nuveiannounced this week it has agreed to go private via an acquisition by private equity firm Advent International. The all-cash deal values Nuvei at around $6.3 billion.
Canada-based Nuvei offers global card acquiring services, alternative payment acceptance methods, crypto payments, fraud and risk management, analytics and more. The company offers serves businesses across a range of industries in more than 200 global markets, facilitating 150 currencies via 600 payment methods. Nuvei’s customers include large brands such as New Balance, Shein, and Microsoft.
“This transaction marks the beginning of an exciting new chapter for Nuvei, and we are glad to partner with Advent to continue to deliver for our customers and employees and capitalize on the significant opportunities that this investment provides,” said Nuvei Chair and CEO Philip Fayer. “Our strategic initiatives have always focused on accelerating our customers revenue, driving innovation across our technology, and developing our people. Bringing in a partner with such extensive experience in the payments sector will continue to support our development.”
Fayer will continue to serve as Nuvei’s Chair and CEO and will lead business operations. The company’s current leadership team will also remain in place once the deal is closed.
Nuvei went public in 2020 and now has a market capitalization of $6.08 billion. The company anticipates that operating under Advent, which has been investing in the payments space since 1984, will offer it resources, operational and sector expertise, and the capacity for investment.
“Our deep expertise and experience in payments give us conviction in the opportunity to support Nuvei as it continues to scale from its base in Canada as a global player in the space,” said Advent Managing Director Bo Huang. “We look forward to collaborating closely with Nuvei to capitalize on emerging opportunities to help shape the future of the payments industry.”
The deal is expected to close in late 2024 or early 2025.
Payments leader Visa launched its Subscription Manager service this week.
The new offering enables financial institutions to give Visa cardholders an easy way to track and manage their subscriptions.
Visa made its first Finovate appearance at FinovateSpring in 2010.
Expected to reach $406 billion by 2025, the international subscription economy has been an increasingly attractive opportunity for fintechs and financial services companies alike. The growth of the subscription economy has meant a surge in demand for solutions to help consumers deal with their ever-growing reliance on subscription services. Among Finovate alums alone, firms from Minna Technologies to Subaio have demonstrated leadership in this “subscription management” space.
As such, it is little surprise to learn that global payments leader Visa is getting into the game. The company announced the launch of its Subscription Manager service this week. The new offering will enable financial institutions to provide Visa cardholders with an easy way to track and manage their subscriptions.
“Managing subscriptions can often feel like a maze, with consumers sometimes feeling trapped in a cycle of confusing charges,” Visa Global Head of Issuing Solutions Kathleen Pierce-Gilmore said. “Our goal is to make this process simpler and ensure cardholders know exactly where their money is going, and when.”
Visa’s Subscription Manager streamlines information on recurring payments, locating that data in one place to make it easy for cardholders to see where their card details are stored, view the recurring payments that are on each card, and to stop recurring payments where services are no longer wanted. Whether the subscription type is a streaming service, a gym membership, or a utilities payment, Visa’s Subscription Manager gives its cardholders a new level of convenience and control when it comes to ensuring that they are only subscribed to the actual services they want and use.
Currently available as a pilot project in select regions, Subscription Manager is the latest addition to Visa’s Digital Enablement product suite. The suite includes a set of tools and solutions designed to enable issuers to offer better digital experiences for their cardholders.
Visa has been a Finovate alum since its debut at FinovateSpring in 2010. A leader in digital payments, Visa facilitates transactions across more than 200 countries and territories. The company is publicly traded on the NYSE under the ticker “V” and has a market capitalization of $556 billion. Ryan McInerney was appointed CEO in February 2023.
Interested in demoing at FinovateSpring in San Francisco in May? We are happy to read applications from innovative companies with new solutions that are ready to show. Visit our FinovateSpring hub today to learn more.
On December 13, 2022, Samuel Bankman-Fried, founder and CEO of international cryptocurrency exchange FTX, was charged with two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering. Last week, Bankman-Fried, referred to colloquially as “SBF,” was sentenced to 25 years in prison and ordered to repay more than $11 billion.
A lot has happened in the world of cryptocurrencies between that December indictment and SBF’s sentencing. Here are five things that took place in the world of crypto between that day and this one.
Bitcoin Boomed
By the time Bankman-Fried was charged in December of 2022, the price of bitcoin had been in a dizzying plunge for nearly a year. Topping out at just over $59,700 in November 2021, bitcoin was trading at $16,700 by mid-December of the following year.
Since then, cryptocurrencies in general and bitcoin in specific, have been on a tear. Bitcoin is up nearly 3x from those mid-December lows, trading north of $66,000. Ethereum is up 2.8x from its December lows.
Observers believe that the current boom in cryptocurrencies is different from the previous boom which in many ways put crypto on the cultural map. Part of this has to do with the “cleaning out” of bad actors such as SBF (and others), as well as growing regulatory consideration of the legitimate goals of the good ones. And while this sometimes has contributed to its share of headaches, it has also led to one of the most promising developments in crypto: the launch of spot bitcoin ETFs.
The Spot ETFs are Here!
One of the most anticipated developments in the cryptocurrency space was the launch of U.S. spot bitcoin ETFs. And within a month of Bankman-Fried’s charging, those spot bitcoin ETFs arrived.
As we reported in Tales from the Crypto in January, the U.S. Securities and Exchange Commission approved of eleven spot bitcoin exchange-traded funds. The ETFs were an immediate hit; digital asset manager CoinShares noted that more than $870 million poured into the new funds in the first three days. And like the underlying asset they track (and track better than previous bitcoin ETFs that were based on bitcoin derivative holdings), these funds have soared in the weeks and months since inception.
Crypto Crime Collapses
“Collapse” may be a bit strong, but “2023 saw a significant drop in value received by illicit cryptocurrency addresses,” according to a report issued earlier this year by Chainalysis. The report – 2024 Crypto Crime Trends – noted that from a high of $39.6 billion in 2022, the total cryptocurrency value received by illicit cryptocurrency addresses dropped to $24.2 billion in 2024, just a little over 2021’s $23.2 billion mark. The report also showed a decline in the illicit share of all cryptocurrency transaction volume from 0.42% in 2022 to 0.34% in 2023. A decline in both crypto scamming and hacking revenue in 2023 was also reported.
It’s still a dangerous world out there. The Chainalysis report also showed a rise in ransomware and darknet market activity and expressed particular concern about the former. “The growth of ransomware revenue is disappointing following the sharp declines we covered last year,” the report reads, “and suggests that perhaps ransomware attackers have adjusted to organizations’ cybersecurity improvements.” The report links to its previous reporting on this trend.
More Crypto Indictments
SBF was not the only crypto entrepreneur to run afoul of the law over the past year and half since his arrest in late 2022. Alex Mashinsky, co-founder and former CEO of cryptocurrency lending platform, Celsius Network, was indicted and arrested in July of 2023 on charges of fraud and market manipulation. Mashinsky’s arrest followed a civil lawsuit filed against him by the Attorney General of New York accusing him of securities fraud while serving as Celsius CEO. The SEC has also charged Mashinsky with violating Federal security laws. Mashinsky has pled not guilty to the criminal charges.
Changpeng Zhao, co-founder and former CEO of cryptocurrency exchange giant Binance, was another high-profile player in the crypto space who ran into major legal issues in 2023. Zhao launched Binance in 2017 and, within eight months, grew the company into the largest cryptocurrency exchange in the world by trading volume. Because of this, however, regulators began to pay closer attention to Zhao and Binance and, by 2023, the scrutiny had yielded consequences. In June, the SEC sued him and his exchange for violations of U.S. securities rules. By November, Zhao had agreed to resign from Binance and pay a fine of $50 million as part of his guilty plea. The exchange also pled guilty and paid $4.3 billion in fines.
Ripple Wins and Loses Against SEC on XRP
While the time between December 2022 and March 2024 represented in many instances the correcting hand of authority putting some restraint on the industry, there were some instances in which it was authority that found itself restrained. In July of last year, for example, a Federal judge sided with Ripple in its argument against the Securities and Exchange Commission with regard to the status of its token XRP. The SEC had argued that XRP was a security and thus subject to its jurisdiction. Ripple, on the other hand, contended that XRP was not a security when sold on the open market via crypto exchanges.
Unfortunately for Ripple, the judge also ruled that Ripple’s institutional sales of XRP did represent unregistered securities offerings. And this week we learned the extent of the punishment the SEC wants to mete out for this offense: $1.95 billion. In a statement on X, Ripple CEO Brad Garlinghouse was unequivocal in his opinion on what the SEC is asking for:
“The SEC plans to ask the judge for $2B in a case that involved no allegations (let alone findings) of fraud or recklessness,” Garlinghouse wrote. “There is absolutely no precedent for this. We will continue to expose the SEC for what they are when we respond to this.”
