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.