eToro prepares for US IPO, targets $3.5B+ valuation ????; Bitcoin shatters $100k milestone ????; FDIC is ramping up FinTech oversight ????

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?? Hey, Linas here! Welcome to a ?? weekly free edition ?? of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

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1. The ultimate list of resources for building and scaling billion-dollar companies ?? [1,500+ pages of knowledge, data and advice to launch & scale your next unicorn startup in 2025]
2. AI 100: Top Artificial Intelligence Startups of 2024 ???? [these companies raised $28B already. Find whose backing them, unlock their exclusive pitch decks & learn from the best ??]
3. The Ultimate List of Resources to Promote Your Startup for FREE ?? [380+ free places to post your project or startup to maximise exposure & accelerate growth ]
4. Revolut's fraud crisis deepens with €700,000 lawsuit ????[what it’s all about, what it means for the FinTech giant & the broader industry + some bonus reads inside]
5. Robinhood accelerates global expansion amid strong growth metrics and record performance ???? [a recap of their latest numbers, plans for the future & why they matter + a bonus deep dive into Robinhood & its latest financials]
6. Citi launches major AI initiative to transform employee productivity ???? [why it’s a good move, what’s next for AI in Finance & Banking + bonus list of top AI startups of 2024 & their exclusive pitch decks]
7. Strong holiday growth fuels BNPL sector ????? [quick recap of the latest numbers & what’s next + bonus deep dives into Klarna & Affirm]
8. Bank M&A poised for resurgence as regulatory landscape shifts ???? [what’s happening & what it means + bonus of 5 templates to master the art of M&A]
9. EQT plans strategic sale of Banking Circle, valuing the FinTech at up to $4 billion ???? [what’s the USP here & why it matters + bonus list of M&A resources that can save you billions]
10. Credit card spending surges despite rising delinquencies and record debt levels ???? [brief look at the latest numbers, what they are telling us and what’s next]

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Last week (2-26 December) was another wild week in FinTech. We’re looking into eToro which is preparing for a US IPO with Goldman Sachs and targetting a $3.5B+ valuation (why it matters & what can we expect next + a bonus deep dive into eToro’s biggest competitor) ????; Bitcoin that just shattered $100,000 milestone (holistic recap of how we got here and what to expect next + bonus dive into the crypto industry & why you should be excited) ????; the FDIC which is ramping up FinTech oversight (what does it mean for the FinTech industry & what can we expect next + some bonus reads inside) ????, and explore other interesting news and developments.

Without further ado, let us dive into what happened in the financial technology sector last week. Let’s connect the dots.

eToro prepares for US IPO with Goldman Sachs, targets $3.5B+ valuation ????

The news ??? Social trading platform eToro is preparing for a potential initial public offering (IPO) in the United States, with 高盛 leading the effort.

According to recent reports from Bloomberg, the company is eyeing a public debut as early as the second quarter, though the timeline remains flexible.

Let’s take a quick look at this.

More on this ?? The Tel Aviv-based company, which offers trading in stocks and cryptocurrencies, is aiming to surpass the $3.5 billion valuation it achieved in its last private funding round. This marks eToro's second attempt at going public, following an unsuccessful SPAC merger attempt in 2022 that would have valued the company at $10.4 billion.

The timing of eToro's IPO plans coincides with significant developments in the cryptocurrency market and regulatory landscape. The platform recently settled with US regulators for $1.5 million over allegations of operating as an unregistered broker, agreeing to restrict its cryptocurrency offerings for US customers.

Founded in 2007, eToro has built a substantial user base of over 38 million registered users across 75 countries. The platform's unique social trading features allow users to follow and replicate the trades of successful investors.

Its investor base includes notable names such as ION Group, SoftBank Vision Fund II, and Velvet Sea Ventures.

?? THE TAKEAWAY

What’s next? ?? Looking ahead, eToro's IPO marks another shift in the FinTech and cryptocurrency sectors. More importantly, the reported appointment of a crypto-friendly SEC chairman by President-elect Trump suggests a potentially more accommodating regulatory environment for digital asset companies. This regulatory shift, combined with Bitcoin's surge past $100,000, could pave the way for more crypto-focused companies to access public markets. Zooming out, the success of eToro's IPO could serve as another bellwether for other FinTech platforms considering public listings. The company's ability to navigate regulatory challenges while maintaining growth will thus be crucial for investor confidence. Watch this carefully!

ICYMI: Robinhood accelerates global expansion amid strong growth metrics and record performance ???? [a recap of their latest numbers, plans for the future & why they matter + a bonus deep dive into Robinhood & its latest financials]

Bitcoin shatters $100,000 milestone ????

The BIG News ?? Bitcoin has just achieved a historic breakthrough, surpassing $100,000 for the first time, driven by optimism surrounding President-elect Donald Trump's pro-cryptocurrency stance and significant institutional investment flows.

The world's largest cryptocurrency climbed as high as $103,853, marking a dramatic rise of over 50% since Trump's November election victory.

Let’s take a look at this.

More on this ?? The surge comes as Trump positions himself as a champion of the cryptocurrency industry, pledging to make the United States "the bitcoin superpower of the world." His nomination of crypto advocate Paul Atkins to lead the Securities and Exchange Commission has particularly energized markets, signaling a potential shift toward more favorable regulatory oversight.

Institutional adoption continues to accelerate, with BlackRock's Bitcoin ETF crossing $50 billion in assets. Since Election Day, spot bitcoin ETFs have attracted more than $7 billion in inflows, demonstrating growing mainstream acceptance. MicroStrategy, already the largest corporate holder of Bitcoin, plans to raise an additional $42 billion for future purchases.

This rally marks a significant evolution in Bitcoin's journey from its origins as a decentralized alternative to traditional finance. The cryptocurrency that began as a rebellion against establishment institutions is now increasingly embraced by Wall Street and, potentially, the U.S. government itself.

?? THE TAKEAWAY

What’s next? ?? Looking ahead, this watershed moment could herald a new era for cryptocurrency adoption and regulation. Trump's proposed policies, including creating a strategic national bitcoin reserve, could fundamentally reshape the relationship between digital assets and government institutions. The combination of political support, institutional investment, and retail interest through ETFs suggests Bitcoin's integration into mainstream finance may accelerate. However, challenges remain. The cryptocurrency's history of volatility suggests potential risks, as evidenced by previous crashes following major milestones. The success of Trump's crypto-friendly agenda will thus depend on political execution and broader market conditions. Additionally, this mainstreaming of Bitcoin represents a departure from its original anti-establishment ethos, potentially creating tension within the cryptocurrency community. That said, the $100,000 milestone may prove to be less a culmination than a stepping stone in Bitcoin's evolution from an alternative asset to an established financial instrument.

FDIC is ramping up FinTech oversight ????

The news ??? The Federal Deposit Insurance Corporation (FDIC) is implementing enhanced monitoring systems to track financial technology companies that partner with US banks, marking a significant shift in regulatory approach.

This development comes in the wake of the collapse of Synapse, a banking-as-a-service provider, which left numerous customers unable to access their funds.

Let’s take a quick look at this and see why it matters.

More on this ?? The new tracking system represents a proactive approach to identifying potential vulnerabilities before they impact the banking sector. Rather than waiting for problems to manifest, FDIC examiners will now have tools to maintain consistent oversight of FinTech companies, even as they change banking partners.

This system complements existing bank supervision mechanisms and primarily focuses on maintaining awareness of third-party relationships with banks.

The regulatory landscape for FinTech partnerships has become increasingly stringent, with the FDIC proposing new rules to strengthen bank record-keeping requirements for deposits received through third parties. Additionally, the agency is considering broadening the definition of brokered deposits to encompass FinTech funds, indicating a more comprehensive regulatory framework.

Zoom out ?? The collapse of Andreessen Horowitz-backed Synapse has served as a catalyst for these changes. The company's bankruptcy, followed by disputes with sponsor bank Evolve Bank & Trust, highlighted the vulnerabilities in the current system.

The situation was further complicated when Evolve faced Federal Reserve enforcement action, demonstrating the interconnected risks within the banking-as-service model.

?? THE TAKEAWAY

What’s next? ?? Looking ahead, one thing is clear - the banking-as-a-service sector will likely face increased scrutiny and compliance requirements. This could lead to higher operational costs and potentially slower innovation as companies adapt to stricter oversight. However, this may ultimately result in a more stable and trustworthy ecosystem. In relation to that, we may see consolidation within the FinTech industry as smaller players struggle to meet enhanced regulatory requirements. Larger, well-capitalized firms may therefore emerge as dominant players, better equipped to handle increased compliance burdens. Zooming out, the relationship between traditional banks and FinTech companies could evolve toward more structured and cautious partnerships. Banks may thus become more selective in choosing FinTech partners, prioritizing those with robust compliance frameworks and stable operations. All in all, these changes suggest a maturing FinTech industry where regulatory compliance and operational stability will become as important as technological innovation. While this might initially slow the pace of innovation, it could lead to more sustainable business models and better protection for consumers' financial assets.

ICYMI: FinTech collapse leads to major banking lawsuit over missing customer funds ???? [holistic recap of the situation, why it matters & what’s next for FinTech & BaaS]

Extra Reads & Quick Bites for Curious Minds ??

• Mastercard Settles Fee Overcharging Case for ￡200M ?? 萬事達卡 has agreed to a ￡200 million settlement in a lawsuit alleging fee overcharging, brought by consumer champion Walter Merricks on behalf of 46 million UK adults. The case, approved in 2021 after a five-year legal battle, sought ￡10 billion in compensation. Mastercard and Visa dominate UK card payments, with a PSR review finding a lack of competition and significant fee increases. The settlement aims to provide meaningful compensation to affected consumers. ICYMI: Mastercard and JPMorgan unite to transform cross-border payments through blockchain ???? [what’s the USP here & why it’s important + bonus deep dives both into JPM & Mastercard]
• Trump Appoints Isaacman to NASA, Bisignano to Social Security ?? Donald Trump has appointed Shift4 CEO Jared Isaacman as the next head of NASA and Fiserv CEO Frank Bisignano to lead the Social Security Administration. Isaacman, known for his SpaceX flights, will drive NASA's mission of discovery. Bisignano, a GOP donor, will oversee social security, bringing his business transformation experience to the role. ICYMI: Shift4's payment processing empire continues to expand globally ???? [dicing into their Q3 2024 financials, breaking them down to see whether Shift4 is worth your time & money in 2024 and beyond]
• FV Bank Adds USDT Stablecoin Support ?? FV Bank now supports direct USDT stablecoin deposits, converting them to USD in real time. This feature simplifies cross-border transactions, reducing reliance on traditional wire transfers and fees. The integration complements FV Bank's existing USDC support, offering customers deposit options in USD, EUR, USDC, and USDT. The bank ensures compliance with AML regulations and sanctions screening, highlighting its commitment to modernizing financial services for the digital economy. ICYMI: Stablecoin market surges to a whopping $190 billion as major players are embracing stables ???? [holistic recap of the latest market movements, what they mean & what’s next + some bonus reads inside]

Money Moves ??

• Mitsubishi UFJ Financial Group (MUFG) says it will pay $664M to take 100% ownership of robo-advisor WealthNavi.
• Israel-based fintech Capitolis has acquired BGC Group’s rates portfolio compression and margin optimization business Capitalab to accelerate rapid growth.
• Cloud-based core banking vendor Mambu has acquired Paris-based banking aggregation and payment automation platform Numeral.

Continue reading by subscribing to Linas's Newsletter. You will receive fresh news about FinTech with hot takeaways every day.

P.S. You might enjoy my earlier pieces as well:

?? Top Resources for Startup Founders, CEOs, Investors & VCs ??

?? The Future of Finance: 10 FinTech & FinServ M&A predictions for 2024 ??

?? 10 FinTech and Finance stocks to include in your portfolio for 2024 ?? | Part I

?? The Future of Finance: 10 FinTech & FinServ M&A predictions for 2024 ??

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About: I am a business developer, sales professional, and FinTech strategist, as well as a Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation and strongly believe that it will change the world for the better. Apart from my daily job at the world’s leading digital asset infrastructure startup where I’m responsible for revenue operations, I'm an active member of the FinTech community and a TechFin evangelist.

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