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: http://bit.ly/3Ftk1c9