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.