Weekly Roundup

SVB Nightmare: Following the collapse of Silicon Valley Bank (SVB) this past week, the bank’s executives are under fire for potential insider stock sales. SVB CEO Greg Becker sold $3.6 million in shares just days before its collapse, and around $30 million in shares over the last two years. Other SVB executives also shed millions of dollars in shares over the past two years, totaling approximately $84 million worth of stock. The SEC and Justice Department are investigating these sales as well as the bank’s collapse.

Retirement Worries: Retirement and investment industry leaders are concerned about a new SEC proposal to implement “swing pricing.” Critics worry that the proposed rule would hinder investors trying to put money away for retirement by allocating the cost of open-end fund transactions to the redeeming shareholders.

Investor Anxiety:  Market volatility is surging following the downfall of three banks in just the past week. According to Cboe Global Markets data, put options volume across all stocks and exchange-traded funds hit the highest level on record last week.

Retail Survey: According to a Brunswick Group survey, around 60% of retail investors have made investments based on information they sourced from Reddit. The survey also found that almost 81% of respondents admitted to using information from digital or social media to inform their investment decisions.

Crypto Moves: Catalyzed by the collapse of three crypto preferred banks last week, US crypto firms are allegedly even more motivated to make the move across the pond. According to Sygnum in Switzerland and Bank Frick in Lichtenstein, there has been particular interest in crypto firms opening accounts offshore in the past week. Some banks, like Swiss bank SEBA, have already started onboarding crypto clients.

Crypto Tax: Crypto companies may be subject to a 30% excise tax according to a provision unveiled last week as part of the Biden administration’s 2023 budget proposal. The proposal would create a phased-in excise tax based on the electricity used to mine cryptocurrency. Crypto companies may also be required to report the amount and source of their power usage.

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

  • Jason Dibble, Editor in Chief of Curatia, wrote an op-ed on the reputational renaissance of high-frequency traders. “Once reviled as the industry’s black-hearted pirates, high-frequency traders have been reborn as crucial market cogs thanks to their client relationships and penchant for providing liquidity,” Dibble wrote.

  • Mark Uyeda, SEC Commissioner, voiced concerns about the SEC’s regulatory agenda. With several compliance deadlines looming, Uyeda is worried about the SEC’s capacity. “When it comes to determining rule implementation dates,” he said. “We can’t have these hit all at the same time.”

  • Gary Gensler, SEC Commissioner, released a statement on the increase in market volatility, reassuring the public that the SEC is acting against any misconduct that may harm investors or the markets. “In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly,” he stated.

  • Michael Casey, Chief Content Officer at CoinDesk, wrote an op-ed claiming that crypto companies may end up with the upper hand in regulation battles against the SEC. Casey cited two recent court cases in which the SEC’s claims against crypto companies were dismissed. “Crypto is, and will for some time, be a quintessential case of unfinished business,” Casey wrote. “Protocols that are sufficiently decentralized won’t be shut down because they literally cannot be.”