Stay up to date with the latest news from fintech! This week, we bring you updates on regulations, legislation, partnerships, and more. Enjoy reading!
Coinbase Reaches $100Million Settlement With New York Regulator DFS (The Fintech Times)
Crypto exchange Coinbase has been fined $100million by the State of New York for significant failures in its compliance programme. The settlement follows an investigation by the New York Department of Financial Services (DFS) into Coinbase and its anti-money laundering (AML) and compliance programmes. The failures brought to light in this investigation incurred the exchange’s customer due diligence (CDD) and transaction monitoring procedures. Its AML programme was largely found to be in violation of the New York Banking Law and the DFS’ virtual currency, money transmitter, transaction monitoring and cybersecurity regulations. Negligence was also evident in its reporting of suspicious activity and sanctions compliance systems, something the DFS deems to be inadequate for a financial services provider of Coinbase’s size and complexity. Coinbase has held a DFS licence since 2017. The accreditation allows it to act as a virtual currency and money-transmitting business in the state of New York. Read more
Netherlands-based Hyarchis buys RegTech DAPAS (Global Fintech)
Netherlands-based Hyarchis, an AI-powered document management solution, has acquired DAPAS, which helps accountants automate their compliance processes. Through this deal, Hyarchis claims it will introduce the first comprehensive compliance solution for the accountancy market. Accountants will be able to automatically bring their compliance in order throughout the entire life cycle of their clients. Founded in 2015 by former KPMG employees, DAPAS provides accountants with a compliance manager. The service gives them insights into risks via a dashboard of the entire client portfolio. Its manager also supplies the user with necessary information around client and order acceptance. Hyarchis stated the acquisition will enable it to enter the customer onboarding space. It will also enable accountants to now manage compliance fully automatedly throughout their customers’ entire lifecycle. Read more
Coinbase Lays Off Another 20% of Its Employees (The New York Times)
The cuts at the cryptocurrency exchange come after nearly a fifth of employees were let go in June, as crypto markets teeter and tech companies rethink their growth plans. Coinbase, the cryptocurrency trading platform, said on Tuesday that it would lay off about 20 percent of its employees, its latest move to cut costs as crypto markets decline and tech companies lower their expectations for growth. The company is laying off about 950 people, it said in a memo to staff, which comes after it cut around 1,100 employees in June, also about a fifth of its work force at the time. Brian Armstrong, Coinbase’s chief executive, said in the memo that “in hindsight, we could have cut further” in the layoffs announced last year. He also implied that the collapse of FTX, which generated turmoil throughout the crypto industry, was having an impact on Coinbase. Read more
Germany’s Gen Z neobank Ruuky files for insolvency (Fintech Futures)
German Gen Z-focused neobank Ruuky, formerly Pockid, has announced it has filed for insolvency after failing to raise additional funding. Writing on LinkedIn, the firm says that due to “challenging times” and despite its best efforts, “we were unable to overcome the market dynamics to raise additional funding”. Ruuky says the decision to file for insolvency “was not taken lightly” and has assured customers that all their funds are secured and its app is still “fully accessible”. The neobank was founded in 2020 in Hamburg by Jes Hennig (CEO), Max Schwarz (chief marketing officer), Timo Steffens (chief financial officer) and Deepankar Jha (chief technology officer). It had raised a total of $4.5 million from three investors: Cavalry Ventures and Vorwerk Ventures most recently, and early-stage accelerator NCA at pre-seed level. Read more
Nuvei snaps up PayTech Paya for $1.3bn (Global Fintech)
Nuvei, a Canadian payments company, has signed a deal to purchase US firm Paya in an all-cash deal worth $1.3bn. According to Finextra, the companies have entered into a definitive agreement that will see Nuvei pay a £9.75 share for Paya, which is a 25% premium on Friday’s closing price. Nuvei said that the deal will create a strong player in the global e-commerce, integrated payments and business-to-business markets. Paya currently processes over $40bn of annual payment volume across credit and debit card, ACH, and cheque, serving more than 100,000 customers through over 2000 distribution partners in areas such as healthcare, education, non-profit, government and utilities. Read more
Fleetcor closes acquisition of Global Reach (Global Fintech)
Fleetcor Technologies, a business payments firm, has completed the acquisition of cross-border payments company Global Reach. With the acquisition, Fleetcor will increase its cross-border payments scale and strengthens its position as a leading non-bank B2B global cross-border payments provider. Global Reach facilitates international payments for customers of all sizes across a variety of industries. This acquisition bolsters Fleetcor’s cross-border payments footprint in the UK, EU and Canada. Today, Fleetcor processes cross-border payments in more than 145 currencies for approximately 27,000 customers worldwide. Fleetcor CEO and chairman Ron Clarke said, “Since entering the cross-border payments space five years ago, we’ve built a market-leading cross-border payments business that will play an important role in our growth moving forward. The acquisition is expected to be immediately accretive in 2023.” Read more
UK associations form crypto industry body; government preps consultation on digital pound (Finextra)
Five UK industry bodies have formed an alliance to help guide the nation’s digital currency future. The City of London Corporation, Digital Pound Foundation, The Payments Association, TheCityUK and UK Finance say their aim is to develop better policies, practice and regulation around digital currencies. By combining the expertise and extended network of the five associations, the group will seek to enable a safe and secure environment for innovators to grow and attract international investment into the UK, while also helping to create a constructive bridge between the associations representing both incumbents and the emerging players in the sector. Read more
Fintus acquires fellow German fintech Finstreet (Fintech Futures)
Fintus, a Germany-based Software-as-a-Service (SaaS) provider of low-code automation software to the financial services sector, has completed its acquisition of fellow German fintech Finstreet. Founded in 2014, Finstreet develops tailor-made workflow automation software for banks and leasing and factoring companies. It is among the key software providers to the domestic cooperative banking sector. It has 90+ employees and 100+ clients. Finstreet’s core product is Eco.Banking, an end-to-end onboarding digitisation platform for commercial credit application activities. Developed in 2016, “Eco.Banking is Finstreet’s most successful product offering to date”, according to the company. Finstreet also offers DialogOnline, an omnichannel, low-code helpdesk and contract documentation management portal for banks and their clients. This was launched in 2021 in partnership with several cooperative banks. Read more
Bank of France exec proposes licencing for crypto companies (The Paypers)
The governor of the Bank of France has proposed stricter regulatory requirements for cryptocurrency businesses in the context of the sector’s volatility. Governor François Villeroy de Galhau proposed that the current registration for cryptocurrency businesses should be replaced by a licence. The executive also emphasised that France should act before upcoming EU regulations come into effect and make French government licensing mandatory for digital asset service providers (DASPs). At the time of writing, the French financial markets authority, the Autorité des Marchés Financiers (AMF), has registered about 60 companies that are involved in cryptocurrencies, including Binance. In the context of everything that has happened in the cryptocurrency sector in 2022, François Villeroy de Galhau urged France to move as quickly as possible to make DASP licencing mandatory. According to royalsblue.com, digital asset service providers that are looking to obtain a licence are expected to adhere to certain standards as far as business conduct, available financial resources, and organisation are concerned. Read more
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