Weekly Roundup

2023 Priorities: Last year, the SEC largely focused on regulating issues around ESG, cryptocurrency, Regulation Best Interest, and cybersecurity. Now, the agency’s regulatory priorities are paring down: the SEC announced that it will prioritize cybersecurity, ESG, and digital engagement in 2023.

NYSE Losses: Investors hurt by NYSE’s malfunction are unlikely to recoup their losses. Losses could amount to millions of dollars, and retail brokerages have submitted thousands of claims. According to experts, full recovery for retail investors is not likely due to procedural issues. An internal panel at NYSE will evaluate claims on a case-by-case basis.

Cyber Attack: Financial data group Ion Markets suffered a cyber attack that affected derivatives that trade on exchanges. The attack impacted post-trade processes, like trade matching and keeping track of risk and margin requirements. CME Group and Intercontinental Exchange both stated that several of their members were impacted. The Futures Industry Association, the CFTC, and the US Treasury department are now involved, working with affected parties, regulators, and other market participants.

IOSCO Principles: The International Organization of Securities Commissions added revisions around unexpected market disruptions, market access, high-frequency trading, and investor education. “The 24 revised Principles seek to support the physical commodity derivatives markets in providing their fundamental price discovery and hedging functions, while operating free from manipulation and abusive trading schemes.”

Ethics Amendments: The SEC proposed amendments to modernize its ethics compliance program. “I was pleased to support today’s proposal to strengthen, modernize, and optimize the SEC’s ethics requirements,” said SEC Chair Gary Gensler.

Climate Disclosures: Many expect the SEC to finalize and implement rules on climate-related disclosures within the year. The new disclosure rules would require listed companies to disclose information about their direct and indirect greenhouse gas emissions. The SEC’s plan plays a part in the growing awareness of ESG issues among public companies.

Lobbying Disclosures: Binance Holdings, the world’s largest crypto exchange, used the same lobbyists to pitchWashington lawmakers as its US affiliate Binance US. The discovery implies linkages between two organizations that have repeatedly claimed to operate independently. The disclosures come at a time when Binance US is seeking SEC to approve a $1bn purchase of the assets of Voyager Digital.

In the Mix: This Week’s Top FinTech Thought Leader

  • Nicole Elam, president and CEO of the National Bankers Association, spoke on this week’s Fintech [Study Hall] podcast about the ever-changing banking landscape, its impact on underserved communities, and the National Bankers Association’s agenda for 2023. 

  • Caroline Crenshaw, SEC commissioner, is calling for stronger disclosure requirements among companies that sell unregistered offerings. Crenshaw is concerned that private markets have grown too large, and that potential fraud has become harder for regulators to detect.

  • Jim Cramer, CNBC Mad Money host, said the benchmark S&P 500 could be approaching a pivotal moment. The S&P fell 1.3% to 4,017.77 on Monday ahead of a packed week of earnings. Cramer noted that if the S&P 500 can avoid a major dip this week, then the future looks optimistic.

  • French Hill, Congressman (R-Ark), will chair Congress’s new subcommittee dedicated to digital-asset policy. The subcommittee plans to focus on payments. Hill will focus on “creating a regulatory and legal framework for digital assets, including digital payments, that protects consumers and investors, while keeping America as the leader in FinTech and blockchain innovation.”

  • Todd Phillips, Phillips Policy Consulting Principal and former member of the CFTC’s Market Risk Advisory Committee, wrote an op-ed in MarketsMedia calling for Congress to reauthorize the CFTC, the federal regulatory agency that is charged with regulating derivatives. Phillips wrote that “the CFTC has consistently been at the forefront of identifying and working to address market changes—such as the use of financial derivatives, algorithmic trading, and cryptocurrencies.” He went on to say that reauthorization is an opportunity for Congress to take stock of the CFTC’s mission and markets and give the CFTC new authorities to address developing concerns.


Weekly Roundup

NYSE Mayhem: NYSE had a glitch that impacted over 250 stocks and caused dramatic price swings. Two-thirds of NYSE-listed securities, including large companies like Wells Fargo and Nike, started trading on Tuesday without having held an auction to determine their opening price, leading to sudden swings. In addition, 81 stocks mistakenly had short-selling restrictions applied. The exchange blamed the glitch on a manual error, which caused a nearly four-hour trading halt.

Proposed Rule: The SEC proposed a new rule prohibiting conflicts of interest in certain securitization transactions. The Commission is only allowing a 30-day comment period, and market participants, such as SIFMA, are pushing for additional time to meaningfully comment.

Genesis Crash: Crypto exchange Genesis filed for bankruptcy last week. The filing marked the fourth major crypto lender to declare bankruptcy since last spring, and the latest to do so following the collapse of FTX. Other major lenders that have folded include Celsius Network and Voyager Digital.

Crypto Investors: According to a survey by eToro, crypto is now the second most widely owned asset class for young women aged 18-34 – second only to cash. Global crypto ownership by young women increased from 29% in the third quarter of 2022 to 34% in the last quarter.

Grayscale Lawsuit: The DC Court of Appeals expedited oral arguments in Grayscale’s lawsuit against the SEC. Both sides will present their case on March 7. Grayscale initiated the lawsuit last June following the SEC’s decision to reject the company’s application to turn its bitcoin trust into a spot bitcoin ETF.

Fee Rates: Starting February 27, the fee rates for most securities transactions will be set at $8.00 per million dollars. The new rates were determined in accordance with Section 31 of the Securities Exchange Act of 1934.

Crypto Scrutiny: Crypto companies that attempted to go public over the past year claim that they faced increased scrutiny from the SEC, and believe that the pace of the SEC’s review process has been hurting their efforts to IPO. SEC Chair Gary Gensler disagrees, stating that much of the crypto industry is noncompliant.

Treasury Algos: Client execution algorithms have become a common feature of the equities, futures, and foreign exchange markets, yet large Treasury traders have shown little interest in building the algorithms out. In contrast, smaller dealers believe the market is ready for algo disruption.

In the Mix: This Week’s Top FinTech Thought Leader

  • Hester M. Peirce, SEC Commissioner, called for SEC rules around cryptocurrency regulation. She said the SEC should regulate digital assets through rulemaking, asserting it would provide more regulatory clarity for the cryptocurrency industry. “If we continued with our regulation-by-enforcement approach at our current pace, we would approach 400 years before we got through the tokens that are allegedly securities,” Peirce said at the Digital Assets at Duke conference.

  • John Reed Stark, lawyer and former SEC official, defended the SEC’s enforcement efforts in the crypto space. Stark criticized crypto lobbyists for labeling the SEC’s enforcement actions as “regulation by enforcement” – calling the term a “Bogus Big Crypto Catch Phrase.” He believes security regulation works through litigation and SEC enforcement.

  • Elizabeth Warren, U.S. Senator, praised Gary Gensler’s crypto regulation efforts. She stated that the SEC is still ramping up regulation and encouraged lawmakers to give Gensler the necessary resources and authority in all corners of the crypto market.

  • Ed Tilly, CEO of Cboe Global Markets, spoke to Bloomberg TV about the evolution of trading, next gen investors, and his big picture outlook. Tilly encouraged retail investors to take in multiple sources of information, noting the dramatic increase of publicly available information since he started trading in the 80s.

  • Mark Govoni, CEO of Liquidnet, explained in Markets Media how a tumultuous 2022, evolving regulation, and new technology have changed the operation of trading desks. Govoni stated that executing complex and lucrative high-touch trades remain challenging and the role of brokers is more important than ever. “Brokers are carving out a nuanced and highly valuable role that’s more consultative and increasingly central to traders looking to deliver effective and differentiated trading strategies,” he wrote.


Weekly Roundup

SEC Lawsuit: The SEC sued Genesis Global Capital LLC and Gemini Trust Company LLC over a $900 million crypto-lending program that allegedly violated investor-protection laws, claiming they were offering unregistered securities. Gemini cofounder Tyler Winklevoss called the charges “totally counterproductive.”

Automated Trading: A Modern Markets Initiative study noted the benefit of automated trading technology for investors, including those rebalancing their portfolios in these uncertain times. Among other things, the study concluded that investors benefit from reduced bid-ask spreads, with 30% more lifetime savings as a result of reduced trading costs of market automation.

Crypto Crime: According to estimates from blockchain analysis firm Chainalysis, illegal cryptocurrency activity reached a record $20.3 billion in 2022. The report states that this high is mostly due to the growing number of crypto-related entities that the U.S. government sanctioned in 2022.

Crypto Enforcement: The SEC issued 30 cryptocurrency-related enforcement actions in 2022, a 50% increase from 2021 and the highest number since 2013, when the agency began issuing the actions. According to a Cornerstone Research report, 73% of the SEC’s crypto-related enforcement actions in 2022 alleged unregistered securities offerings, 70% alleged fraud, and 50% alleged both.

Bitcoin ETF Appeal: Grayscale filed a reply brief to the SEC regarding its efforts to appeal for the approval of a spot bitcoin ETF, which is currently in litigation. Grayscale claims that the SEC had acted arbitrarily in treating spot traded exchange-traded products differently than futures traded products.

ETF Inflows: According to data released by ETFGI, the global ETF industry reached $856.16 billion of net inflows in 2022. This is the second-highest annual net inflow, following 2021 at $1.29 trillion. 

In the Mix: This Week’s Top FinTech Thought Leader

  • Jacob Sansbury, Pluto Co-Founder & CEO, published an op-ed highlighting data that points to ongoing retail investor concern about a potential recession and economic uncertainty. The op-ed discusses how retail investors can navigate uncertainty in 2023 by incorporating technology to reduce bias.

  • Brandon Tepper, SVP of Investment Intelligence at Nasdaq, spoke with Traders Magazine about key themes in 2022 and what he expects for 2023. “To improve optionality, Investors will likely look toward data that is available from simple APIs via the cloud. There is also potential for a greater shift toward open-source delivery standards rather than relying on traditional hardware and connectivity.”

  • Joshua Topolsky, veteran tech editor and media entrepreneur, will become editor-in-chief and president of Sherwood Media, a new subsidiary of retail trading platform Robinhood. The subsidiary will build on existing newsletter Snacks and will focus on original reporting and analysis across newsletters, social media, and events.

  • Mark Uyeda, SEC commissioner, thinks the SEC should be doing more to advance opportunities for retail investors. In a conversation with Law360, he said the SEC’s recent market structure proposals contain “very little about improving opportunities for retail investors to broaden their investment opportunities.”

  • Brad Garlinghouse, Ripple CEO, is hopeful there with be a resolution with the SEC lawsuit alleging that Ripple and its executives illegally sold XRP. The decision on whether XRP should be treated as a security has important implications for the broader crypto space.


Weekly Roundup

Pro-Privacy Future: A coalition of organizations in the crypto space is urging the new session of Congress to prioritize data protections to promote “a pro-privacy future.” “Lawmakers have failed to protect our digital privacy for far too long, leaving market solutions as the only practical defense anyone has against unreasonable and constant digital surveillance,” said Lia Holland, the campaigns and communications director at the digital rights nonprofit Fight for the Future.

Coinbase Layoffs: Coinbase said it will cut around 20% of its workforce, about 950 jobs, as part of a restructuring plan. The cryptocurrency exchange’s latest restructuring marks the third round of layoffs since last year.

Crypto Compliance: Executives of crypto exchanges see high compliance costs on the horizon, as they ready to deal with intense regulatory compliance in 2023. While large exchanges will likely be able to withstand the increased enforcement action, small exchanges may be pushed out of the market.

Fintech Trends: VCs predict that fintech funding will be tricky in 2023, but they’re still optimistic about the sector. Some predictions for the sector include increased investments in “safer business models” like selling software to banks and other financial services, a fintech boom in Israel, and increased integration of AI in fintech software.

Crypto Seizure: The federal government plans to seize hundreds of millions of dollars in assets tied to FTX. It is estimated that this involves 56 million Robinhood shares, whose ownership is disputed by FTX and BlockFi. These government seizures will likely complicate customers’ ability to recover their money.

Fintech Crackdown: Jack Ma, Ant Group founder, was ordered to give up control of the Chinese fintech giant following a regulatory crackdown. According to Ant Group, no one person will have overall control moving forward.

In the Mix: This Week’s Top FinTech Thought Leader

  • Kirsten Wegner, CEO of Modern Markets Initiative, joined Jasmine Stoughton for Progressive Policy Institute’s Mosaic Moment podcast to discuss market structure, digital asset market regulation, the role Congress plays in advancing the R&D of financial technologies, and more.

  • Jeffrey O’Connor, Head of Market Structure, Americas, at Liquidnet, analyzed Gary Gensler’s recent market structure proposals in Traders Magazine. “The retail trader currently enjoys zero commission trading, obtainable markets, unlimited size in 10,000+ listed stocks and ETF’s, at prices that are at or better than institutions receive – bringing complexity and regulation to that backdrop is going to be quite a battle.”

  • Jiaying Jiang, assistant professor of law at the University of Florida’s Levin College of Law, criticized blanket callsfor strict and quick regulations in the crypto industry. Jiang stated that lawmakers should not create new regulations simply because the industry is calling for them. Jiang proposed a few solutions to regulate the crypto industry. One is to regulate crypto as “a new asset class,” and formulate rules around it. Jiang also asserted that there needs to be more collaboration when it comes to rulemaking — both domestically and internationally.

  • Stu Alderoty, Ripple General Counsel, urged Congress to grab the reigns in the present crypto-regulatory limbo, and provide some much-needed clarity to the industry. “The U.S. should be leading by example and working with responsible companies to keep trusted players onshore,” Alderoty stated.


Weekly Roundup

Commodities Trading: Following a rough two years of returns, it was reported that more retail traders are turning to commodity trading. Although commodities have outperformed many stocks and bonds in recent years, some participants and analysts have voiced concern regarding financial literacy surrounding commodities trading for retail and risk of volatility.

Climate Disclosures: Early this year, the SEC is expected to complete a new rule that would require companies to disclose more information regarding their vulnerabilities to Global Warming. At least 10 companies have already added climate change risks to their regulatory disclosures. Critics of the potential rule warn of the exorbitant new costs that come with complying with climate risk disclosures.

SBF Pleads: FTX co-founder and former CEO, Sam Bankman-Fried pleaded not guilty to eight criminal charges at his arraignment. Bankman-Fried is facing up to 115 years in prison over charges stemming from the collapse of FTX in November. The charges include misleading investors and using billions of dollars of customer money for personal use.

Coinbase Settlement: The U.S. crypto exchange Coinbase reached a $100 million settlement with New York regulators. The exchange must pay a $50 million fine for letting customers open accounts without adequate background checks and is required to spend $50 million to improve compliance.

Crypto Spats: Cameron Winklevoss, co-founder and president of Gemini, hurled accusations of “bad faith” lending tactics at the head of the Digital Currency Group, Barry Silbert. The spat follows FTX’s shock collapse that caused Genesis to halt customer withdrawals and lending because Genesis had funds stuck in FTX and significant outstanding loans to Alameda Research. The issues at Genesis rippled over to Gemini, as Genesis was the partner for Gemini’s “Earn” program, which let customers lend crypto at annual interest rates as high as eight percent.

In the Mix: This Week’s Top FinTech Thought Leader

  • Joe Mecane, Head of Execution Services for Citadel Securities, criticized the SEC’s proposal to reduce “tick-sizes” to one-fifth of a cent, or possibly one-tenth of a cent. Mecane stated that he is an advocate for reform and thoughtful designation of tick-sizes but called-out the proposal for ignoring critical risks and factors detracting from the liquidity and pricing that investors and companies need and expect.

  • Marc Rubenstein, finance writer and former hedge fund manager, published a piece in Bloomberg criticizing the SEC’s proposed new rules on the stock market. “Wholesalers and the retail brokers they work for alike have long argued they deliver better prices for retail investors. Aside from their ability to offer tighter spreads, they corral retail order flow together, protecting it from institutional activity which would likely trade against it on an exchange.”

  • Gary Gensler, SEC Chair, is pushing back on calls for new laws in response to the rapid collapse of FTX. Gensler argues that the current rules suffice, crypto exchanges and issuers simply need to comply.

  • Megan Barbero, SEC Principal Deputy General Counsel, will be appointed General Counsel, effective January 31, 2023. Barbero’s appointment follows the departure of General Counsel Dan Berkovitz. “Megan has been one of the Commission’s most trusted counselors, and she will bring a skilled and steady hand to the role of General Counsel,” said SEC Chair Gary Gensler.

  • Jennifer Nayar, President and CEO of Sterling Trading Tech, predicted increased demand for after-hours trading and continued vendor consolidation in a conversation with Traders Magazine. She also noted the ability of market participants to take on more control and increased demand for Risk & Margin as significant themes for the new year.

  • Ankit Agarwal, cofounder and CTO of Hexaview Technologies, wrote in Forbes that fintech companies are becoming increasingly essential to the financial services industry. Agarwal stated that a growing tech-savvy audience wants data-driven solutions based on market trends and their behavior. He views the fintech sector as advancing financial inclusion and broadening services across all industries.


Weekly Roundup

Fintech VC Investments Drop: According to Pitchbook data, VC investors pulled back aggressively on fintech dealmaking this year, investing only 35% of what they did in 2021. However, the $79.5 billion invested in 2022 so far will still make it the second highest year on record for fintech VC funding.

Questions Emerge Over Gensler Stock Trading Redesign: The Wall Street Journal Editorial Board cautioned that the SEC stock trading redesign won’t help individual investors. The board called the redesign of stock trading a “regulatory vanity project” that won’t help investors, and warned that if enacted, brokers might have to return to charging commissions or other trading fees.

‘Side Letter’ Deals: An SEC rule restricting “side letter” deals is expected in 2023. The proposal would prohibit private investment funds from giving side letters to chosen investors. According to fund representatives, these deals help private equity and hedge funds attract investors and enacting the proposal as a rule would curtail competition among funds.

FTX Saga Continues: The SEC charged two former FTX associates for roles in the crypto exchange’s collapse. Former Alameda Research CEO Caroline Ellison and former Chief Technology Officer of FTX Trading Gary Wang were charged on Wednesday for their roles in a multiyear scheme to defraud equity investors in FTX.

Crypto Audits: The SEC is increasing scrutiny around how crypto companies are portraying their reports from audit firms. Officials are concerned that investors may be getting a false sense of reassurance from these reports.

Pump & Dump Scheme: According to the SEC, Atlas Trading, a social media handle known for giving advice to small-time retail traders, has come under investigation for taking advantage of novice traders by “feeding them a steady diet of misinformation,” in order to orchestrate a “pump and dump” scheme worth an estimated $100 million.

ETF Popularity: ETFs are growing in popularity among retail traders seeking to mitigate risk while navigating volatile markets and rising interest rates. According to Vanda Research, there has been a 4.4% year-over-year drop in single-stock purchases by retail traders while inflows into ETFs rose nearly 14% this year.

Wine Investments: Fintech startup Vint is enabling retail investors to invest in the wine and spirits market, which has outperformed major asset classes, including stocks, in recent years.

In the Mix: This Week’s Top FinTech Thought Leader

  • Arianne Adams, Senior Vice President, Head of Derivatives and Global Client Services at Cboe Global Markets, outlined themes from 2022 and her expectations for the coming year. She expects there to be continued investor demand for risk management, income generation, and portfolio diversification.

  • Allysia Finley, editorial board member and reporter for The Wall Street Journal, criticized Gary Gensler for not investigating FTX earlier. “The government doesn’t need more regulations to target fraud, which is illegal under the laws already on the books” Finley wrote. “For months [Gensler’s] claimed to have authority over crypto and warned about self-dealing at their exchanges. Why didn’t he investigate the company? That would have given the SEC records of FTX’s sloppy bookkeeping and perhaps its alleged fraud.”

  • Rex Salisbury, Cambrian founder and fintech investor, laid out his fintech predictions for 2023 in Forbes. According to Rex, 2023 will be a standout year for fintech. He predicts a record number of fintech companies will be started by repeat fintech founders, an explosion of Vertical SaaS, and more.

  • Patrick McHenry, incoming Republican leader of the House Financial Services Committee, said at the CNBCCFO Council Summit that he will focus on oversight of the new SEC climate disclosure rule. His remarks come at a time when some House Republicans are calling for the largest defined contribution plan in the world to ban ESG funds from its portfolio lineup.

  • Senator Sherrod Brown, chair of the Senate banking committee, spoke about crypto regulation during NBC’s ”Meet the Press.” Senator Brown urged government agencies to “do what they need to do…maybe banning [cryptocurrencies].”

  • Episode 4 of Study Hall season 2 is out! In case you missed it, Kirsten Wegner sat down with Sputnik ATX CEO Oksana Malysheva to talk about calculated risk-taking, investing, and gaining the confidence to go out on your own. Listen here:


Weekly Roundup

SEC Contemplating Market Changes: The SEC voted to release four proposals among the biggest changes to stock-market rules since the mid-2000s. The proposals include changes to best execution, tick size, disclosures, and review of a potential auction mechanism. Although the proposals are meant to benefit retail investors, it is unclear whether the auction proposal will confer a net benefit to retail investors, who have the narrowest bid ask spreads in history and dependable liquidity. The proposals come in response to a review prompted by last year’s frenzied trading in GameStop.

Industry Reactions: Industry executives appear eager to comment on the SEC’s recent overhaul of stock market rules, with initial reactions rolling in ahead of the public comment period. MMI CEO Kirsten Wegner said, “The auction proposal overlooks and tinkers with time-tested market attributes of price discovery that have greatly improved trading for retail and institutional investors, as far as bid-ask spreads and dependable liquidity in times of volatility.”

Disclosure Rules: Publicly traded companies must now comply with the SEC’s new disclosure requirements in proxy statements covering fiscal years ending on or after Dec. 16, 2022. In August, the SEC adopted final pay versus performance rules requiring disclosure of the relationship between actual executive compensation and the financial performance of a company. The rules apply to all reporting companies with a few exceptions.

Retail Losses: According to Vanda Research, the average retail portfolio is down about 30% this year. By contrast, the S&P 500 Index is down 17%. Investment portfolios belonging to retail traders suffered a $350 billion blow this year. Losses tend to be concentrated in high-profile stocks like Tesla, which wiped out about $78 billion for retail traders alone.

Crypto Outflows: Following FTX’s bankruptcy filing, crypto investors are rushing to withdraw their assets in record numbers. Last month, investors pulled 91,363 bitcoin, nearly $1.5bn USD, from centralized exchanges including Binance, Kraken, and Coinbase. This marks the largest bitcoin outflow on record.

FSB Steps Up: Financial Stability Board (FSB) watchdogs will lay out firm steps to regulate the cryptocurrency industry in early 2023. The board intends to set a timeline for global regulators to implement its first recommendations on global crypto regulation, and detail areas where policymakers could benefit from “more clarity.” This increased oversight comes in response to the issues exposed by recent failures like FTX and Terraform Labs.

Fintech Fines: Under The Office of the Comptroller of the Currency’s (OCC) revised “civil money penalty matrix,” smaller banks risk bigger fines if many consumers get hurt by violations committed by their financial technology or other partners. The OCC will start using the updated guidance Jan. 1.

In the Mix: This Week’s Top FinTech Thought Leader

  • Sam Bankman-Fried, FTX Founder, was charged with eight counts of fraud and conspiracy, in what the U.S. attorney’s office called a scheme to defraud his crypto exchange’s customers and his hedge fund’s lenders. Prosecutors also charged Bankman-Fried with defrauding the U.S. and violating campaign finance rules for conspiring with others to make illegal political contributions.

  • Changpeng Zhao, Binance CEO, is vying to become the “responsible face of crypto” following FTX’s collapse. Zhao appears to be laying the groundwork for a bigger lobbying presence. Days after FTX’s bankruptcy, Binance started a political action committee, and has since significantly ramped up its marketing.

  • Gilbert Garcia, chair of the SEC’s Diversity and Inclusion Subcommittee, said that the SEC should explain why it hasn’t implemented more diversity recommendations for asset managers, and called the SEC’s progress “extremely disappointing.”

  • Jamil Nazarali, EDX Markets CEO, spoke at I.D.E.A.S. 2022. He discussed the evolution of market structure in the digital assets space, and dissected how the future model can simultaneously increase institutional adoption and reduce trading costs.

  • Episode 4 of Study Hall season 2 is out now! MMI CEO Kirsten Wegner sat down with Sputnik ATX CEO Oksana Mindyuk Malysheva to talk about calculated risk-taking, investing, and gaining the confidence to go out on your own. Listen here:


Weekly Roundup

Stock Trade Pricing: The SEC’s five-member commission said that it will consider proposing rules in an open meeting next week to help small investors get better prices on their stock trades. If the panel majority supports the proposals, they will be opened to public comment before the SEC decides whether to finalize them.

Robinhood Retirement: Robinhood announced its new offering, Robinhood Retirement, the “first and only individual retirement account (IRA) with a 1% match on every eligible dollar contributed.” The new retirement offering is aimed primarily at gig economy workers who typically don’t have an employer offering a 401(k) plan.

Retail Survey: According to a new survey from London-based investing insights platform Finimize, only 1% of retail traders plan to sell off their investments in 2023, while 65% will continue investing, and 29% plan to add to their portfolios. A majority (72%) of respondents plan to buy individual stocks next year, with 64% favoring Big Tech names like Apple, Microsoft, Google, and Meta.

Crypto Sentiment: Americans’ opinions on crypto have taken a sharp turn for the worst according to the latest CNBC All-America Economic Survey. Just 8% of Americans have a positive view of crypto, down from 19% in March 2022. The change in sentiment represents crypto’s dramatic fall from an investment that was once touted as its own asset class.

Fintech Social Media: Fintech apps are becoming increasingly social. For example, Shares is an app that turns retail stock trading into a social experience. The app enables users to see what their friends have bought and sold, encouraging discussion. Another app, Loop, allows users to borrow or lend money to friends while integrating social aspects. It awards badges for certain actions, such as promptly repaying loans.

Crypto Reporting: According to a draft of the National Defense Authorization Act (NDAA), the State Department will have to report any crypto payment it makes within 15 days of the transaction. The department will also be required to submit a report to the same committees about the use of crypto for rewards within six months of the act being enacted.

Silvergate Statement: In a US regulatory filing on Monday, Silvergate defended its role in accepting deposits for Sam Bankman-Fried’s conglomerate. The bank asserts that they conducted “extensive due diligence” on crypto exchange FTX and trading shop Alameda Research and highlighted the links Bankman-Fried’s crypto companies had with the US financial system.

In the Mix: This Week’s Top FinTech Thought Leader

  • Kirsten Wegner, Modern Markets Initiative CEO, wrote an op-ed for RealClear Markets outlining imperatives that all policymakers should support to preserve the vital foundational underpinnings of the U.S. markets and secure savings for Americans of all income classes.

    Adrian Griffiths, MEMX Head of Market Structure, wants the SEC to reconsider the MEMX Retail Midpoint Liquidity Program. In the wake of the SEC’s anticipated rulemaking surrounding the market restructure debate, MEMX submitted a letter urging the Commission to think carefully about how the program – and the disapproval thereof – fits into the debate on competition for retail order execution. 

    Lynn Martin, NYSE president, shared insight on the 2023 market during Yahoo Finance Live. “I think the markets will continue to try to find their footing,” she said. Martin said that better performances for stocks and the IPO market boils down to the Federal Reserve’s execution on its policy actions.

    David Schwimmer, London Stock Exchange Group CEO, said that large spikes in volume associated with algorithmic trading have worsened recent market volatility, exposing weak links in the global market infrastructure.

    Jeffrey Sprecher, ICE CEO, said that cryptocurrencies will likely be regulated under existing securities laws, and traditional players like the NYSE may move into tokenized trading. “They’re going to be regulated and dealt like securities,” Sprecher said.

    Stuart Alderoty, Ripple Labs Chief Legal Officer, is putting up a tough fight against the SEC, as the Ripple vs SEC lawsuit nears its 2-year mark. Soon the case may enter a new phase: a federal judge is reviewing dueling motions from Ripple and the SEC, each asking the suit to be resolved in its favor.

    Episode 3 of Study Hall season 2 is out now! In case you missed it, Kirsten Wegner sat down with author Cady North and American Retirement Association CEO Brain Graff to demystify saving. Listen here:


Weekly Roundup

Retail Rule Making: Trading firm Virtu Financial has sued the SEC to get more information about the agency’s plan to write new equity-trading rules. The firm submitted a Freedom of Information Act (FOIA) request in June to determine if the SEC had met legal requirements to evaluate potential investor harm and market risks while considering new rules for the handling and execution of retail stock orders. These new rules could affect how firms like Virtu process orders from retail traders. “We are alarmed by the current SEC’s comments that reflect the diversions from the SEC’s longstanding goal of enhancing and protecting the retail investor experience,” said Virtu Chief Executive Officer Doug Cifu.

Climate Conscious Card: TreeCard, a climate-conscious digital money app, recently raised $23 million from investors including Peter Thiel’s Valar Ventures, EQT, and World Fund. TreeCard uses 80% of the profits it makes from card interchange fees to plant trees through its partner, search engine Ecosia. Its successful fundraising highlights VC interest in companies addressing the climate crisis.

Regulatory Regimes: Calls to erect regulatory regimes to protect investors and consumers are mounting following FTX’s collapse.  “We’re going to have to work closely with our international partners to design a regulatory regime in a framework that helps us to make sure we protect the global economy as we think about innovation like cryptocurrency,” U.S. Deputy Treasury Secretary Wally Adeyemo said.

Tether Loans: Tether Holdings Ltd., the company behind the tether stablecoin, has increasingly been lending its own coins to customers rather than selling them upfront for hard currency. The trend contributes to worries that the company may not have enough liquid assets to pay redemptions in a crisis.

Fintech Fraud: According to a new congressional report, fintech companies oversaw a disproportionately high rate of fraudulent loans through the Paycheck Protection Program during the Covid-19 pandemic. The report states that “at least tens of billions of dollars” from the federal loan program overseen by fintech firms were probably given to applicants who were ineligible or fraudulent.

Yahoo Retail Trading: According to a company source, Yahoo plans to add on new commerce and transaction businesses, such as sports betting and retail stock trading. The retail trading platform within Yahoo Finance would allow retail traders to leverage Yahoo Finance’s data as part of a full suite of end-to-end trading tools, including buying and selling stocks.

In the Mix: This Week’s Top FinTech Thought Leader

  • Adrian Griffiths, MEMX Head of Market Structure, released a white paper examining recent S&P 500 stock splits. The paper illustrates how changing the round lot in high-priced stocks could save investors $2 billion by narrowing spreads and reducing related transaction costs.

  • Changpeng Zhao, Binance CEO, said on Friday that “most governments now understand adoption [of crypto] will happen regardless” and that is it better to regulate the industry than fight against it. Despite the recent implosion in the crypto space, he expects the sector to recover – “just because FTX happened it does not mean that every other business is bad.

  • Lynn Martin, president of the New York Stock Exchange, spoke out about the impact of volatility and market uncertainly on companies going public. In the last year, initial public offering proceeds dropped by approximately 93% on average.

  • Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, said he “didn’t ever try to commit fraud”and “wasn’t trying to commingle funds” during his interview at the New York Times Dealbook Summit. Bankman-Fried attributed FTX’s failure to his not understanding how exposed his firm had become to troubles at Alameda Research, a hedge fund and market maker also founded by Bankman-Fried.

  • Episode 3 of Study Hall season 2 is out now! This week we’re demystifying saving with author Cady North and  American Retirement Association CEO Brain Graff