Weekly Roundup

Fintech Reducing Consumer Costs: According to a recent 2023 United Nations report, fintech technology has drastically reduced the cost of financial services for everyday consumers. Specifically, innovative technological advancements, like direct deposits, have expanded access to online banking and reduced expenses for more customers on traditional banking services, such as cashing checks.

SEC vs. Kraken: The SEC filed charges this week against Kraken, the second-largest cryptocurrency exchange in the U.S., claiming that the platform illegally operated as an unregistered securities entity. Speifically, the Commission alleges that Kraken commingled its own financial resources and digital assets with customer funds. Kraken disputes the charges, stating that “This is incorrect as a matter of law, false as a matter of fact and disastrous as a matter of policy.”

Retail Trading Remains Active: According to a recent report by Nasdaq, daily retail trading levels are currently clocking in at about $35 billion. This figure is in line with trading numbers from the previous 10 months of 2023 and remains ahead of pre-Covid levels.

Mastercard Battles Crypto Fraud: In an effort to bolster fraud prevention in its cryptocurrency transactions, Mastercard has partnered with regulatory technology platform Feedzai. The collaboration involves integrating Feedzai directly with Mastercard’s CipherTrace Armada platform, enabling real-time alerts regarding suspicious crypto transactions. Industry experts believe that the move will specifically help the credit card service detect potential money laundering and mule accounts through the use of AI technology.

Tether Helping Combat Human Trafficking: Tether this week announced that the firm has frozen $225 million worth of its cryptocurrency assets that has been potentially linked to a known human trafficking group. The move comes in response to a request from the U.S. Secret Service, which collaborated with Tether and crypto exchange OKX on a “months-long investigative effort.” This development underscores the industry’s efforts to partner with law enforcement agencies to crack down on any illicit activities occurring on crypto blockchain networks.

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

  • At the Financial Markets Quality Conference, Sapna Patel, Morgan Stanley’s head of Americas market structure & liquidity strategy, participated in a panel discussion about the problems surrounding the SEC’s proposed market structure reforms. “The question that I ask when you see a fundamental change, like the one contemplated, is what problem are we trying to solve because our markets are fairly efficient,” said Patel. “I think we should take a step back and be careful about breaking something that works for investors.”

  • Tuang Lee Lim, chair of the International Organization of Securities Commission’s (IOSCO) financial task force, released a statement addressing the organization’s rejection of requests from the crypto industry for a customized regulatory framework for stablecoins. “The activities of CASPs and their associated risks frequently mirror those observed in traditional financial markets,” said Lee Lim. “The regulatory approach taken is therefore consistent with IOSCO’s principles and associated standards for securities markets regulation.”