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


Weekly Roundup

Fintech Deals: Fintech companies are increasingly becoming acquisition targets for traditional U.S. banks as valuations have plunged around 70% this year. The decline presents an opportunity for banks to beef up their technology for digital banking, online payments, and other financial services and to diversify beyond lending.

Crypto Study: A new study by the Bank for International Settlements suggests that about 75% of retail crypto traders have lost money on Bitcoin. Data spanning 95 countries from 2015 to 2022 indicates most app downloads occurred when Bitcoin’s price was above $20,000.

Class Action Lawsuit: A class action lawsuit has been filed on behalf of FTX users claiming that celebrities endorsed unlicensed securities. In addition to FTX, other defendants in the suit include NFL star Tom Brady, model Gisele Bundchen, NBA players Steph Curry and Shaquille O’Neil, MLB’s David Ortiz and Shohei Ohtani, and the Golden State Warriors. The complaint says damages clear the $5 million minimum to bring the case in federal court.

Electronic Trading: RBC Capital Markets has launched a second algorithm on Aiden, its AI-based electronic trading platform. The algorithm leverages 300+ data inputs, combinations of actions, and post-execution optimization to solve for the arrival price challenge and reduce slippage.

NYSE ETF: The PIMCO Active Bond Exchange-Traded Fund has begun trading on the NYSE. This is the first ETF to list on the NYSE in the past 15 years and the first-ever active ETF to be listed on the NYSE floor. In recent years, the SEC has approved a series of rule changes that have allowed a broad range of ETFs to list on the NYSE.

Rule Changes: Rule changes proposed by the SEC could raise scrutiny of sponsor-led secondary deals. The changes would require private fund managers carrying out adviser-led secondary transactions to report their completion dates and describe the deals within one business day of closing.

Spot Bitcoin ETFs: Following FTX’s bankruptcy, the SEC’s approval of spot bitcoin ETFs isn’t looking too likely. “Because the SEC’s concerns about allowing a spot bitcoin ETF are rooted in the resiliency and transparency of the spot markets, I can’t imagine the collapse of FTX will be good for the prospects of a spot bitcoin ETF in the short term,” said Jeremy Senderowicz, a shareholder at Vedder Price. Approval would likely require a change in SEC commissioners.

CryptoLaw Petition: Around 4,000 people have signed a petition on the CryptoLaw website demanding that Congress investigate SEC head Gary Gensler’s “actions in the FTX fraud.” The CryptoLaw website is run by lawyer John Deaton, who is representing Ripple against the SEC and contributes frequently to the public discourse on the case.

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

  • Adrienne Harris, superintendent of the New York Department of Financial Services, proposed that lawmakers in Washington take a closer look at the New York state regulatory regime: “We would like for there to be a framework nationally that looks like what New York has, because I think it is proving itself to be a very robust and sustainable regime.” She highlighted New York’s extensive registration process, which includes an assessment of a company’s organizational structure, the fitness of executives, financial statements, and Anti-Money Laundering and Know Your Customer regimes.

  • Steven Maijoor, chair of the Financial Stability Board’s crypto working group, urged global authorities to agree on global norms for the crypto industry. His comments were in response to FTX’s recent demise and the subsequent market turmoil. Rapid growth of crypto markets coupled with incomplete supervision means that they will “soon reach a point where they represent a threat to the stability of the global financial system” Majoor said.

  • Gurbir Grewal, director of the Enforcement Division at the Securities and Exchange Commission, is trying to restore trust in the financial markets by hitting rule breakers with stiffer penalties and requiring them to acknowledge their misconduct. “This is so critically important right now given the volatility and the uncertainty we’re experiencing across the financial markets and in the crypto market,” Grewal said. This year the SEC secured a record $6.4 Billion in enforcement payments.

  • John Ray, FTX’s new CEO, slammed the company’s management, saying FTX’s financial statements could not be trusted. Ray said in a court filing that FTX was the worst case of corporate failure that he had seen in his more than 40-year career as an insolvency professional.

  • Eric Stockland, head of quantitative strategy at BMO Capital Markets, says that we’ve entered the golden age of electronic equity trading, as venues compete for institutional business on performance, rather than fees. Stockland noted innovation from Cboe Global Markets in equities trading including rolling out periodic auctions in the US this year and building order types such as the midpoint discretionary order and the quote depletion protection order.

  • Episode 2 of Study Hall season 2 is out now! This episode explores all crypto with Global Digital Asset & Cryptocurrency Association’s CEO Gabriella Kusz and Grayscale Chief Legal Officer Craig Salm. We discuss the state of crypto, regulation, Spot ETFs, FTX’s recent crash, and more. Listen to the full podcast here:


Weekly Roundup

Hedging Strategies: Investors are reeling from failed US stock hedging strategies meant to protect investors from market declines. Funds that focused on buying equity-put options — and those who purchased call options on the Cboe’s Vix index — have especially struggled to make gains.

Fintech Layoffs: Many Fintech companies have had layoffs this past month, but the layoffs keep coming. Chime confirmed that it is letting go of 12% of its employees, Opendoor announced it was letting go of 18% of its staff, Chargebee laid off about 10% of its staff, and Stripe laid off 14% of its staff, among others.

Fintech Adoption: According to a study by FIS, Millennials lead the way when it comes to fintech adoption. The study found that 32% of millennials are likely to use banking services from a fintech or neobank in the next year compared to 22% of Gen Z, 13% of Gen X, and 5% of baby boomers.

Stablecoin falls: The world’s largest stablecoin fell further away from its one-to-one peg to the dollar. One unit of Tether fell to $0.9775. Tether’s Chief Technology Officer, Paolo Ardoino, tweeted that Tether had processed $700 million in withdrawals in 24 hours.

SEC Investigation: The SEC and DOJ are investigating the Crypto platform FTX following its sudden implosion this week. Agency officials believe some of FTX.US’s assets, as well as FTX’s lending product, might constitute securities that, under U.S. law, should have been registered with the SEC before being sold to investors.

FTX Withdrawals: Crypto exchange FTX has reopened withdrawals after halting them earlier this week due to liquidity issues. One user was able to withdraw $2.6 million worth of ether (ETH) while another was able to get $1.3 million of USDC out of the exchange. A total of $6.8 million was withdrawn in an hour.

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

  • Sam Bankman-Fried, CEO of FTX, broke his silence following FTX’s dramatic crash this week. Bankman-Fried tweeted, “I’m still fleshing out every detail of, but at a very high level, I fucked up twice…the first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower… I also should have been communicating more very recently.”

  • Christopher Waller, Federal Reserve Governor, vocalized his continued skepticism of a potential U.S. digital currency, saying, “the case for adopting one is not yet convincing to me and many others.” Fed policymakers remain divided on the need for a central bank digital currency, with Fed Vice Chair Lael Brainard, second in command at the Fed, among those expressing support.

  • Episode 1 of Study Hall season 2 is out now! This episode explores all things fintech and elections with Kalshi’s Tarek Mansour and DC strategist Katelynn Bradley. Listen here: