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Fintech Highlights - 8/22/2023

The Fed issues a cease-and-desist letter to a small, rural bank. More Americans are falling behind on their credit card payments. Classwallet raises a round.  Here's what we've been watching this week….👇

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The Fed issued a cease-and-desist letter to Farmington State Bank

The Fed issued a cease-and-desist letter to a small, rural bank — one with ties to FTX, the cryptocurrency platform started by Sam Bankman-Fried.

Driving the news: The order says Farmington State Bank and its holding company FBH Corp. violated commitments to state and federal regulators, Crystal Kim writes.

  • The Fed said the bank worked with third-party stablecoin issuers. According to the regulator, engaging in such activity would have required approval from the Fed's Board of Governors, the Reserve Bank of San Francisco or Washington state regulators. The bank received no such approval.

Catch up quick: The bank, which also conducted business as Moonstone Bank, drew prior scrutiny in the wake of FTX's collapse; Alameda, the hedge-fund arm of FTX, invested $11.5 million in the bank and had a stake.

  • However, the Fed's order did not mention FTX or Alameda.

Flashback: The San Francisco Fed approved FBH's application to be a holding company in Sept. 2020 as it bought Farmington Bancorp.

  • FBH at the time didn't have a master account, but Farmington State Bank did (since the 1990s).

What's next: Farmington and FBH will voluntarily liquidate.

  • The bank was ordered to take steps "to preserve records and suspend any deletion, overwriting, modification, or other destruction of all paper documents, electronic documents, physical items, and data under their control," the Fed's letter read.


Data: New York Fed Consumer Credit Panel/Equifax. Chart: Axios Visuals

More Americans are falling behind on their credit card payments

  • Why it matters: Even as inflation declines, Americans are increasingly relying on credit cards to make their budgets work — or maintain their "levels of consumption," as Moody's Investors Service put it.

🧮 By the numbers: The rate of new credit card delinquencies has passed its pre-COVID level, clocking in at 7.2% in the second quarter, per a report out this month from the New York Fed.

  • Auto loan delinquencies were at 7.3% in Q2 — also higher than pre-pandemic levels.
  • Mortgage delinquencies remain very low.

😱 Stunning stat: Credit card balances rose by $45 billion in the second quarter, rising past $1 trillion for the first time in the N.Y. Fed survey's history.

👀 What to watch: Millions of Americans will soon have to start making student loan payments again — and undoubtedly some will rely on credit cards to maintain their lifestyles. That could potentially drive these delinquency rates higher.


Goldman Sachs (NYSE: GS) says it's exploring alternatives for its personal financial management business, including its RIA unit, which oversees $29b in assets.  More here ->

Mastercard Inc. has agreed to take a minority stake in the financial-technology business of MTN Group Ltd., Africa’s biggest wireless carrier, sending the telecom company’s stock soaring by as much as 10%. The size of Mastercard’s stake won’t be disclosed until the transaction closes More here ->

Splitit (ASX: SPT), an Atlanta-based BNPL provider, agreed to go private via a $60m investment from Motive Partners, Thorney Investment Group and Parea Capital.  More here ->

General Atlantic invested in Flint Group, a home services firm operating in five U.S. markets.  More here ->

Cardea, an Atlanta-based wealth management firm, agreed to go public at an implied $175m enterprise valuation via Global Blockchain Acquisition Corp. (Nasdaq: GBBK).  More here ->

Hg is considering a sale process for GGW Group, a German insurance broker that could fetch around €1.5b, per Bloomberg.  More here ->

TA Associates agreed to sell Australian insurance broker Honan to Marsh & McLennan (NYE: MMC), with Bloomberg reporting a price of around A$700m. More here ->

DLocal (Nasdaq: DLO), an Uruguayan payments firm with around a $4b market cap, is exploring a sale, per Bloomberg.  More here ->

Param, a Turkish fintech, acquired Czech BNPL provider Twisto from Zip Co. (AXX: ZIP). Param backers include ERBD, CEECAT, Alpha Associates and RevoCapital. More here ->

Matera, a Brazilian fintech backed by Kinea Investimentos, acquired Cinnecta, a Brazilian customer behavior and loyalty company, from firms like Brazil Venture Capital and Wayra. More here ->

Monument Re, a Bermuda-based buyer of European life insurance portfolios, hired Citi and Fenchurch Advisory to explore strategic options, including a possible sale, per Reuters.  More here ->


ClassWallet, a digital wallet-based purchasing and reimbursement platform for public funds, raised $95m. The startup enables companies to navigate the spectrum of purchasing school supplies to distributing microgrants. More here ->

Finofo, a Canadian provider of currency risk management solutions, raised US$1.25m per Axios Pro.  More here ->

Vegapay, an Indian digital lending and card management platform, raised $1.1m in pre-seed funding. Specialising in lending technology, Vegapay has engineered a system allowing both regulated entities and fintechs to further their issuance of cards and enhance lending penetration across India. More here ->


Neo Group, an Indian asset management and financial advisory, is raising $50m from Peak XV Partners, per TechCrunch. India’s asset management industry, with over $540 billion in assets under management, is increasingly attracting more players. Jio Financial Services, part of Asia’s richest man Mukesh Ambani’s Reliance, last month joined forces with the U.S. giant BlackRock to form a 50:50 joint venture to launch asset management services in the South Asian market. More here ->


BitGo, a Sioux Falls, S.D.-based crypto custody startup, raised $100m in Series C funding at a $1.75b valuation. More here ->

Dinari, an SF-based startup tokenizing real-world assets, raised $7.5m in seed funding. Founded in 2021, Dinari wants to provide blockchain-backed access to corporate equity through its dShare platform. The dShare platform offers access to securities such as Apple or Tesla stock using a wallet on the Arbitrum network for users outside the United States due to regulatory reasons. More here ->

ZetaChain, an SF-based layer-one blockchain, raised $27m in equity funding.  Founded in 2021, ZetaChain, which will soon stage its mainnet launch, aims to unite multiple blockchains — including Ethereum, Polygon, BSC and even non-smart contract chains like Bitcoin and Dogecoin — on a single platform. More here ->

Helio Protocol, a DeFi lending and stablecoin project, raised $10m from Binance Labs.  More here ->

CityPay.io, a Georgian crypto payments startup, raised €2m.  The fintech allows businesses to receive payments in crypto via one of four channels - web payment integration, POS terminals for location-based companies, e-mail billing for one-time payments, and initial depositing for individuals. The payments are converted to fiat. More here ->


Nubank, one of the world’s largest digital financial services platforms, launched Nubank Lar Seguro, a home insurance offering, in partnership with Chubb, the world’s largest publicly traded property and casualty insurer. Nubank Lar Seguro will become available to eligible customers in Brazil over the next few months. More here ->

SureIn, a German insurtech for SMEs, raised €4m in seed funding. More here ->


Flueid, a company using data and intelligence to accelerate the Verification of Title (VOT) across the real estate life cycle, raised $12.5M, which includes a $10M Series B1 raise and $2.5M in debt financing. It adds to its $20M raise announced in October 2022. More here ->

Homemade, a real estate flipping platform raised $4m seed round. The company states: "this funding is instrumental for Homemade’s evolution. It enables us to further develop our platform, expand our services, and ensure a smooth and rewarding home flipping experience for our community." More here ->

Dcbel, a Montreal-based home energy management startup, raised over US$50m in Series B funding.  More here ->

From the Stash

PayPal names Intuit’s Alex Chriss CEO, replacing Schulman - PayPal Holdings Inc. named Alex Chriss chief executive officer, tapping a longtime fintech executive with a focus on small businesses to lead the beleaguered payments giant. Chriss, who led Intuit Inc.’s QuickBooks business, will start in the new role on Sept. 27.  More here ->

Hippo Temporarily Halts All New Business US-Wide - Hippo has made the unexpected decision to temporarily halt all new business activities across the entire country. More here ->

Uber and Cover Genius Partner to Provide Protection for Drivers in Brazil - Embedded insurance specialist, Cover Genius, has announced an exciting new partnership with Uber to offer enhanced protection for drivers in Brazil. More here ->

Jack Henry onboards 100-plus FIs to FedNow - Banking software provider Jack Henry is onboarding more than 100 financial institutions to the FedNow payment rail since its launch last month and has seen an increase in client demand for cloud and banking services in the fourth quarter of 2023, which ended June 30. More here ->

Marqeta extends collaboration with Block - Card-issuing fintech Marqeta announced earlier this month that it has secured a four-year extension of its contract with digital payments company Block to power that company’s Cash App card. More here ->

Coinbase says it can now offer cryptocurrency futures contracts in bitcoin and ether to eligible customers in the U.S. -  More here ->

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