Happy New Year TWIF UK & Europe friends,

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This week’s edition is a long summary of what has been going on in fintech over the past few weeks as we were absent over the holidays due to the platform switch.

Note: TWIF UK & Europe will be short hiatus and be back on 30th January.

Tweet of the week 🦉🏆

Funding 💸

Highlights below of deals since the last post in the fintech space across the UK & Europe.

🇪🇺 SMB accounting service Fiscozen raised a €8m Series A from United Ventures and Keen Venture Partners.

🇪🇺 BNPL provider for banks Sileon raised a $1m seed round from Visa.

🇪🇺 No code payment solution NORBr raised a €2m seed round from PortfoLion.

🇪🇺 Money management app Frid raised a NOK 7m seed round from North venture and The Factory.

🇪🇺 Marshmallow Pensions raised a €750k seed round.

🇪🇺 DEX provider Ondefy raised a $1m seed round.

🇪🇺 Custom insurance provider Insurfox raised a €2m Series A.

🇪🇺 Credit insurance provider Cartan Trade raised a €8m Series A from Intact Financial.

🇬🇧 Financial management solution Updraft raised a £108m Series A comprised of £100m in debt from NatWest and £8m in equity from LC Nueva, Auluk Investments and Faber Capital.

🇬🇧 Moneyhub has secured a £15m investment from Phoenix Group, the parent of Standard Life.

🇬🇧 Financial services customer messaging company Nivo Solutions received a £1m investment from Maven Equity, Barclays and Northern Powerhouse Investment Fund.

🇬🇧 Property investment platform Bricksave raised a $6m Series A from Graphene Ventures.

🇬🇧 Recognise Bank raised a £25m round.

₿ Crypto trading firm Amber Group raised a $300m Series C as it seeks to ride through the FTX collapse.

Challenger Banking 🚀

🇪🇺 The CFO of N26 is leaving after only 18 months.

🇪🇺 Payment For Order Flow is now allowed to be banned in Europe but countries are not required to do so.  It is likely Germany will keep PFOF but France, Netherlands and others will ban it.

🇪🇺 Trade Republic is offering a 2% interest rate on deposits to new and existing customers, powered by its new bank partner Deutsche Bank.

🇬🇧 Wise customers are to earn “interest” in line with local rates on deposits in their accounts.

🇬🇧 LHV UK is to start issuing loans to SMEs across the UK after receiving FCA approval.

🇬🇧 Atom Bank is to make its four day work week permanent for the entirety of 2023. Its job applications were up 33% and employee churn down 20%

🇬🇧 The Coalition for a Digital economy, a trade group of UK fintechs including Monzo, Wise and Moneyhub, have signed an open letter that urges for clear direction from the government once the OBIE is dissolved.

🇬🇧 Revolut is launching a paid internship and one year grad scheme next year aimed at university students in their penultimate year. It is also to delay publishing its 2021 full year results until early 2023.

🇬🇧 “Bank of things” Twig has acquired French neobank Vybe.

🇬🇧 Neobank Zopa has hit £3bn in deposits thanks to its high interest savings account.

🌍 The number of US SMB loans increased over 12% in 2021 but the loan amount fell by 21% according to nationwide statistics.

🌍 US neobank Chime is reported to have attempted to acquire earned wage access firm DailyPay twice last year for up to $2bn.

Digital Assets ₿

🇪🇺 The United Nations Refugee Agency is trailing the use of blockchain to get payments to displaced Ukrainians.

🇪🇺 The ECB is to finalise the design of a digital euro in H2 2023.

🇪🇺 The Turkish Central Bank has run a test transaction for a digital Lira.

🇪🇺 Italy is set to impose a 26% capital gains tax on crypto traders.

🇪🇺 An ECB board member says crypto trading should be treated like gambling.

🇬🇧 Global credit network for institutions Hidden Road received its digital asset registration by the FCA, making it the only prime broker that holds both an investment licence and digital asset registration.

🇬🇧 Zodia Custody, a JV between Standard Chartered and Northern Trust, has appointed a new CEO.

🇬🇧 The UK is giving a tax exemption to foreign investors who purchase crypto through local investment managers or brokers.

🌍 BlockFi has asked a court to allow customer withdrawals citing it has “no legal or equitable interest” in the funds.

🌍 100 BTC tied to defunct exchange QuadrigaCx has been moved out of cold wallets that were thought to be inaccessible by anyone.

🌍 Visa is exploring automating recurring payments for custody crypto wallets.

🌍 Bitcoin miner Core Scientific has filed for Chapter 11 bankruptcy with an estimated $1bn-$10bn in liabilities from 1,000 - 5,000 creditors.

🌍 Twitter has integrated crypto prices into the app’s search results.

🌍 Solana defi exchange Raydium was hacked, resulting in $4.4m in losses.

🌍 The Bank of International Settlement has pulled back on its proposal to penalise banks use of permissionless blockchains

🌍 Crypto auditor Mazars has paused all work for its crypto clients that include Crypto.com, KuCoin and Binance.

🌍 The Federal Reserve Bank of Boston has concluded it’s CBDC project for a digital dollar.

🌍 The Fed, FDIC and OCC have jointly warned banks off stablecoins and to seek digital alternatives citing the risk associated with crypto.

🌍 The SEC is warning crypto investors to be wary of “proof of reserves” and that it is not sufficient proof that a company has enough assets to cover its liabilities and are not audits.

🌍 Two of Solana’s top NFT projects, DeGods and Y00ts, are moving to Ethereum and Polygon respectively. The SOL token has continued to slump even while Ethereum founder Vitalik Buterin tweeted support for Solana.

🌍 Defi trading platform Defrost Finance is to return $12m of stablecoins it recovered from an exploit.

🌍 Fidelity has filed a trademark to allow to to give investment advice in the metaverse.

🌍 Kraken is exiting the Japan market due to market conditions and a weak market globally.

🌍 A fight is breaking out amongst creditors of FTX for the 56 million Robinhood shares bought by SBF, allegedly using a $546m loan from Alameda. BlockFi, FTX and SBF himself are all claiming ownership. SBF pleaded not guilty to his eight criminal charges after being released on a $250m bond. His two former executives are cooperating with authorities.

🌍 FTX’s FTT token has been called a security by the SEC which could have large knock on implications for the ecosystem.  The token was used to finance FTX’s acquisition of BlockFolio.

🌍 A judge ruled that Celsius customers who had interest-bearing accounts had turned over possession of their crypto to the lender which means their deposits are part of the bankruptcy estate. NY State has sued Celsius ex-CEO Alex Mashinsky for fraud.

🌍The Bahamian Securities Commission has taken custody of $3.5bn of FTX deposits and will release when the Bahamas Supreme Court directs them. Alameda Research reportedly sold some tokens last week. FTX has claimed this happened without authorisation.

🌍 Investors in Gemini are suing the exchange over its interest-earning crypto product which was halted in November and alleging the assets weren’t registered properly with authorities. Three users have also requested a class action arbitration against Genesis and Digital Currency Group.

🌍 The deal for Binance.US to acquire Voyager may fall under federal review, with the SEC making an objection. Binance has acquired South Korean rival Gopax.

🌍 According to The Block, Coinbase and Binance have seen market share gains since FTX imploded.

🌍 Coinbase has launched an ERC 20 recovery tool for users to self recover unsupported Ethereum tokens. It is also focused on staking revenue from retail and institutional clients. It was also hit with a $50m fine by NY State regulators for AML failings and has to invest $50m in compliance

🌍 Three Arrows Capital reported $1bn in assets against $3bn of liabilities in July.

🌍 Crypto payments firm Wyre is rumoured to be shutting down after its $1.5bn acquisition by Bolt fell through.

🌍 Crypto bank Silvergate has written off the $196m it paid for Facebook’s Diem assets and is laying off 40% of its workers.

Traditional Banking 🏦

🇪🇺 Banque de France, HSBC and IBM have reported on their testing of wholesale CBDC transactions.

🇪🇺 Denmark recorded 0 bank robberies in 2022 due to its increasingly cashless economy. It had 1 in 2021.

🇪🇺 Nordic bank DNB has automated half of its chat traffic using Boost.ai’s conversational AI tool.

🇪🇺 CaixaBank has created a European research consortium to improve cybersecurity.

🇪🇺 Santander is working with Global Payments on a corporate card offering in the US.

🇬🇧 Santander is trialling recycling for its plastic cards in some UK branches.

🇬🇧 TSB has been fined nearly £50m to its bungled IT migration back in 2018.

🇬🇧 Nine UK banks have incorporated non profit Cash Access UK to finance the development of shared banking hubs across the country.

🌍 Goldman Sachs is rumoured to be laying off 4,000 employees which equates to 8% of staff. It will push its consumer banking business through expanding its partnership with Apple and is working on a high-yield savings account for Apple cardholders as well as some back-end services for Apple Later.  The head of its consumer banking business is stepping down amid the scaling back of its ambitions

🌍 JP Morgan is continuing to grow its payments venture in Asia with an investment into In-Solutions Global.

🌍 Wells Fargo was fined $3.7bn for violations in its consumer banking.

Fintech Infrastructure 🚧

🇪🇺 The EU has reduced the frequency of re-authentication for AISP from 90 days to 180 days, helping to reduce the friction for consumers.

🇪🇺 Solaris has shuffled around its board as it seeks to execute on its new strategy and focus on profitability.

🇬🇧 The replacement body for the OBIE has identified three priorities to tackle its goal of increasing competition and innovation which include focusing on OB payments, adopting a model for future data sharing and establishing a foundation for ongoing development of open banking.

🌍 A number of Canadian financial organisations have sent a letter to the minister of finance to encourage the opening up of the payment system to local credit unions and PSPs.

🌍 Green Dot has extended its partnership with Wealthfront, where the former provides checking and money movement infrastructure of the latter’s Cash Account.

Payments 💰

🇪🇺 Payments provider PPRO has integrated mobile wallet MB WAY to expand its coverage in Portugal.

🇪🇺 Klarna is to report sustainability data on electronic goods using data from Clarity AI.

🇪🇺 A group of European banks from Denmark, Germany, Iceland, Italy, Latvia and Norway, led by eID Project, have been chosen to deliver a cross-border payment pilot for the EU digital identity wallet.

🇪🇺 JP Morgan is acquiring a near 50% stake in Greek payment firm Viva Wallet for $800m.

🇪🇺 The ECB has found cash is still the most frequently used payment method at the POS.

🇪🇺 Italy has scrapped its plans to allow merchants to refuse digital payments for anything less than €60 after pushback from the central bank and the EC.

🇬🇧 Tribe Payments has partnered with PayNice to provide risk monitoring services for merchants.

🌍 SoFi has unveiled its BNPL product, Pay in 4, through a partnership with Mastercard.

🌍 Stripe and Shopify have pledged $11m to the Frontier fund to remove carbon dioxide from the environment.

🌍 The Federal Trade Commission is proposing that Mastercard share customer account information with competing networks so they can process debit payments.

🌍 China’s UnionPay has announced it has issued 200 million cards outside of the mainland and that it has 30 million merchants outside China.

🌍 Visa and Tappy Technologies are working with Abu Dhabi Islamic Bank on contactless payment wearables.

🌍 Nilson reports that gross card fraud continued to decline through industry fraud efforts and was $0.066 globally per $100 in volume.

Longer reads 📜

• Venture Capital Red Flag Checklist - Bill Gurley
• Merchants tokenize - Tom Noyes
• The New Conglomerates - Marc Rubinstein
• Credit cards as a legacy system - Patrick McKenzie
• SoftPOS is Ready for Prime Time in 2023 - Joel Van Arsdale and Elisabeth Magnor, Flagship Advisory
• Phantom: The Quest to be Crypto’s Multichain Champion - Mario Gabriele
• Part I: WTF is Account Abstraction - Julien Niset, Argent

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