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Weekly News Highlights – 18 November 2022

Stay up to date with the latest news from fintech! This week, we bring you updates on regulations, legislation, partnerships, and more. Enjoy reading!

US banks launch digital asset settlement platform PoC (Finextra)
Some of the biggest names in the US banking industry are coming together on a proof of concept for a regulated digital asset settlement platform. Citi, Mastercard, Wells Fargo and the New York Fed’s innovation centre are among those involved in the 12-week project to explore the feasibility of an interoperable digital money platform known as the regulated liability network (RLN). The PoC will test a version of the RLN design that operates exclusively in US dollars where commercial banks issue simulated digital money or “tokens” – representing the deposits of their own customers – and settle through simulated central bank reserves on a shared multi-entity distributed ledger. Read more

Genesis’ Crypto-Lending Unit Is Halting Customer Withdrawals in Wake of FTX Collapse (Coindesk)
The lending arm of crypto investment bank Genesis Global Trading is temporarily suspending redemptions and new loan originations in the wake of FTX’s collapse, Interim CEO Derar Islim told customers on a call Wednesday. The unit, known as Genesis Global Capital, serves an institutional client base and had $2.8 billion in total active loans as of the end of the third quarter of 2022, according to the company’s website. Genesis Trading, which acts as Genesis Global Capital’s broker/dealer, is independently capitalized and operated separately from that lending unit, Islim said. He added that Genesis’ trading and custody services remain fully operational. Islim told the participants on the call that Genesis is exploring solutions for the lending unit, including finding a source of fresh liquidity. He said Genesis intends to detail its plan to clients next week. Read more

New Zealand Government kickstarts open banking (Finextra)
The New Zealand Government has instructed banks to begin sharing data with competitors under a new open banking framework. Last July, the Government agreed to establish a consumer data right framework (CDR) which would require data holders like banks to ensure New Zealanders can gain access to a wider range of products and services that better meet their needs. David Clark, minister of commerce and consumer affairs, says: “The banking sector is a natural starting point for rolling out consumer data rights, as the industry has already made significant progress towards open banking on their own. Banking was also the first sector designated in Australia so we can learn from them.” Read more

The European Union is considering a ban on privacy coins (The Paypers)
The European Union has targeted privacy coins and might issue a ban that would prevent banks from dealing with such cryptocurrencies. Cryptocurrencies that aim to enhance user privacy and support anonymous means of payments could be forbidden as a result of new European AML rules according to a draft of a money laundering bill from Czech officials that ended up at CoinDesk. The document states that credit institutions, financial institutions, and crypto-asset service providers would all be affected by the new rules. Moreover, crypto asset providers would have to verify the identities of customers for transactions under USD 1,040 (EUR 1,000) while larger payments would incur further verification. Entities that operate outside the bloc would have to verify if their counterparties are licensed and see what kind of money laundering controls they employ. According to EU officials cited by CoinDesk, the new measures aim to minimise the risks that come with crypto assets specifically designed to avoid traceability. Examples of such privacy coins include zcash, monero, and dash. In order to pass into law, the bill must be agreed by both the Council and the European Parliament. Read more

Google to pay $391mn in its biggest privacy settlement (Financial Times
US states claimed location data continued to be collected even after users chose to stop having their whereabouts recorded. Google has agreed a $391.5mn settlement with 40 US states over its collection of users’ location data, the most the internet giant has ever paid out over a privacy complaint. The settlement followed allegations from the states that Google had continued to collect location data through a number of its mobile apps, even after users had opted to stop having their whereabouts recorded.
The states’ investigation, which was led by Oregon and Nebraska, trained a spotlight on to one of the most valuable types of data that the search giant collects in order to target its advertising. According to the allegations, Google offered separate settings to control location data, with the result that even after users turned off their “location history”, a separate setting called Web and App Activity collected the data by default. The allegations covered the period from 2014-2020. Read more

Tax software firm SurePrep snapped up by Thomson Reuters for $500m (Fintech Futures)
Thomson Reuters Corporation has signed a definitive agreement to acquire SurePrep, a US-based tax automation software and services provider, for $500 million in cash. SurePrep is expected to generate approximately $60 million of revenue in 2022 and grow more than 20% annually in the next few years. Elizabeth Beastrom, president of tax and accounting professionals at Thomson Reuters, says the company “sees significant value and opportunities in SurePrep”. Founded in 2002 and based in Irvine, California, SurePrep claims a client list of 23,000+ tax professionals in the certified public accounting (CPA) and wealth management space. The company says it leverages artificial intelligence (AI) to automate the collection of digital documents directly from clients and the processing of those documents, automatically extracting and populating key data into the firm’s tax compliance software. Its core software and services include 1040SCAN, SPbinder and TaxCaddy. Read more

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