The US is making headlines for the actions taken by its regulators against the blockchain fintech sector. After the collapse of FTX, regulators started preparing private and public legal actions against many companies – including Paxos, Kraken and Custodia. Even if it seems that the purpose of regulators is creating a safer environment for crypto traders and investors, it’s also true that they’re the most affected by the millionaire fine reserved to Kraken, or the order to stop issuing BUSD directed to Paxos. The price of most cryptos dropped – making (especially) retail traders losing money. Moreover, the increased barrier between traditional banks and blockchain and crypto companies is affecting many businesses across different sectors. Another opportunity the US could be missing is the creation of a skilled workforce – since blockchain is here to stay, and it’s projected to grow also in the next decade, and the attraction of investments. In the meantime, the blockchain sector – and fintech in general – continues thriving across the globe – especially in emerging markets. This and much more in this number of FinTech Weekly: follow us on Twitter to stay on top of fintech news and events!
Blockchain Cryptocurrency Regulation
Paxos, the crypto firm that cooperates with the top centralized exchange to issue Binance’s stablecoin, announced that it will stop issuing new BUSD from February 21. This news comes after US regulators ordered the company to halt its production.
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Regulators also hit Kraken, another big player in the crypto sector. The centralized exchange decided to pay the fine imposed by the SEC after US regulators revealed that the staking services offered by Kraken can be considered as unregistered securities.
Banking Cryptocurrency Regulation
In the meantime, crypto firms in the US are in trouble. It seems that the Fed is increasingly widening the barrier between banks and crypto firms. One of the most recent actions taken by regulators was the rejection of the membership application of Custodia, a bank that wants to act as a bridge between the traditional financial system and the blockchain-based financial system in the US.
Business Cryptocurrency Regulation
Also the fintech giant PayPal halted its projects related to cryptos. After all the actions taken by regulators, the fintech company stopped its projects related to the creation of its stablecoin.
Fintech constantly grows: users prefer fintech companies because, as it emerged from a The Harris Poll’s survey, they help to save money, time and avoid financial stress. But banks see all this as a threat.
In the meantime in Hong Kong, the centralized exchange LBank is ready for new listings: on February 16, the platform will list Entropy (ENT) – which will be available for trading in the ENT/USDT pair.
Business InsurTech Investments
The fintech space thrives and expands, especially in emerging markets, even if the blockchain sector is in trouble. InsurTech is making headlines: in India, the insurtech InsuranceDekho has just raised $150 in a funding round led by Goldman Sachs Asset Management.
TechCrunch analyzes the fintech failures of the last 10 years: some ideas didn’t go mainstream, some just picked the wrong time.
In the US, Fidelity National Information Services, which acquired Worldpay in 2019, announced the spin off of the payment business. The fintech group acquired Worldpay for $43 billion, but didn’t manage to integrate the business.
Regulators became more severe for what concerns crypto regulation, but it’s important to consider that blockchain is not only used for cryptos. The whole sector is about to face another impressive growth in the next decade: according to ReportLinker, the fintech blockchain sector will reach a 40.66% CAGR by 2032.