Record fine for crypto firm ??; Revolut CEO to sell major stake in secondary share sale ??; Apple unlocks iPhone payments in landmark EU deal ??????

?? 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.

If you’re not a subscriber, here’s what you missed last week:

1. The Startup Growth Toolkit: Top 5 Resources to Scale Your Business to New Heights ?? [unlock the secrets to startup success with these essential resources]
2. Top resources for building and scaling billion-dollar startups ?? [600+ pages of knowledge and advice to launch & scale your next unicorn in 2024]
3. JPMorgan’s Q2 2024: a financial fortress poised for growth despite headwinds ???? [unpacking the most important numbers that show a financial fortress poised for growth despite headwinds + lots of bonus reads & deep dives inside]
4. Rejected Visa-MC settlement is a swipe at inequity ??; Record fine for crypto firm highlights regulatory challenges ?? [what it’s all about & why it matters + some bonus dives into both Visa & Mastercard]
5. India's WealthTech Boom ?????? [a quick recap of what’s happening & what can we expect in the near future]
6. Small banks are embracing AI to enhance personal touch, not replace it ???? [a quick look at how small banks are successfully leveraging AI + some bonus reads on AI in Finance]
7. First half of 2024 sees alarming surge in digital currency thefts ????[a recap of the latest data & what it means + what can we expect next in crypto]
8. African FinTech that's expanding global reach and B2B offerings ????
9. RBI joins Project Nexus ??????
10. Visa and Mastercard extend EU tourist card fee caps to 2029 ????
11. Big Banks flex financial muscle with dividend hikes & buybacks ??

and more! Don't miss out and join the community here????

Last week (8-12 July) was just an insane and super interesting week in the new age of finance. We will look at a record fine for the crypto firm by Lithuanian regulators (what it highlights about sanctions enforcement challenges & what can we expect next); Revolut whose CEO is set to sell a major stake in secondaries (+ some more developments & a deep dive into Revolut’s latest financials); Apple which just unlocked iPhone payments in a landmark EU deal (what it’s all about & what’s next + a bonus deep dive into Apple & Apple Intelligence), and other interesting news and developments.

Without further ado, let us dive into what happened in Finance 2.0 last week. Let’s connect the dots.

Record fine for crypto firm highlights sanctions enforcement challenges ????

The (BIG) news ??? Lithuania's Financial Crimes Investigation Service (FNTT) has imposed a record-breaking fine of €9.3 million ($10.1 million) on crypto payment company Payeer for violating international sanctions and anti-money laundering regulations ??

This landmark case underscores the growing scrutiny of cryptocurrency firms and the complexities of enforcing sanctions in the digital asset space.

Let’s take a quick look at this.

More on this ?? Payeer, which offers cryptocurrency exchange and e-commerce payment services, was found to have allowed Russian customers to conduct transactions in rubles through EU-sanctioned Russian banks. The company also provided crypto wallet and account management services to Russian individuals and entities, potentially circumventing international sanctions.

The investigation revealed that Payeer had amassed at least 213,000 customers over 18 months, generating revenue exceeding €164 million. The FNTT accused the company of intentionally failing to properly identify and verify customer identities to maintain its substantial income.

Notably, Payeer had relocated its operations to Lithuania after losing its license in Estonia, raising questions about regulatory oversight and the ease with which crypto firms can shift jurisdictions. The company's alleged non-cooperation with authorities further complicated the matter.

P.S. it seems that Payeer is no longer in Lithuania and has now relocated to Paraguay ????:

The fine consists of €8.2 million for sanctions violations and €1.1 million for anti-money laundering failings, marking the largest penalty ever imposed on a virtual asset service provider in Lithuania.

?? THE TAKEAWAY

What’s next? ?? This case is likely to have significant implications for the broader crypto industry. First and foremost, we must think about increased regulatory scrutiny: other jurisdictions may follow Lithuania's lead in cracking down on crypto firms that fail to comply with sanctions and AML regulations. This could lead to more frequent and severe penalties across the industry. Next, we can expect enhanced compliance measures. Crypto companies will likely need to invest heavily in robust Know Your Customer (KYC) and AML procedures to avoid similar fines and maintain their licenses (that will basically kick in with MiCa). Another important thing is jurisdictional challenges. The ease with which crypto firms can relocate may prompt increased international cooperation among regulators to prevent regulatory arbitrage (in the case of Payeer, the voyage was very interesting - Estonia > Lithuania > Paraguay). Last but not least, this might also have an impact on crypto adoption. Stricter enforcement could slow the growth of crypto services in certain regions, particularly those affected by international sanctions. All in all, as the crypto industry matures, finding a balance between innovation and regulatory compliance will be crucial. The Payeer case serves as a wake-up call for crypto firms to prioritize adherence to international sanctions and AML regulations or face severe consequences.

Revolut CEO to sell a major stake in secondary share sale ????

The news ??? British FinTech giant Revolut has been making waves in the financial world again with a few significant developments.

Let’s take a quick look at this.

More on this ?? First, it was reported that CEO Nik Storonsky plans to sell a portion of his multibillion-dollar stake as part of a larger $500 million share sale. This sale, which includes employee shares, aims to value the company at a whopping $40 billion+, a substantial increase from its previous $33 billion valuation in 2021. Not too shabby! ??

ICYMI: HUGE: Revolut aims for a $40 billion valuation in a share sale ???? [what it’s all about & why it’s huge + unpacking the most important numbers and data so we could see the bigger picture here & some bonus reads on Revolut and its biggest competitors]

We already know that the company's financial performance has been beyond impressive, with 2023 seeing record pretax profits of ￡438 million ($554 million) and revenues reaching $2.2 billion, nearly doubling from the previous year.

On top of that, Revolut 's customer base has also grown significantly, adding 12 million new users in 2023 for a total of 45 million globally. Solid!

ICYMI: Revolut’s 2023 financials: a FinTech rocket with astronomical growth, but regulatory asteroids loom ???? [breaking down the key facts & figures, uncovering the most important numbers & what’s next for Revolut + bonus deep dives into Starling Bank, Monzo and JPMorgan]

Plans ?? Revolut is not resting on its laurels, however.

The company has ambitious plans to enter the mortgage market in Ireland, potentially as early as the first half of 2025. This move could shake up the Irish mortgage landscape, currently dominated by three major banks.

However, regulatory hurdles may delay these plans, as the Central Bank of Ireland is likely to impose oversight despite Revolut's Lithuanian banking license.

The company continues to expand its product offerings, which already include current accounts, loans, insurance, investments, and buy-now-pay-later services. It's also targeting growth in the Asia-Pacific region, particularly in Australia, New Zealand, and Singapore.

?? THE TAKEAWAY

What’s next? ?? Looking forward, Revolut's actions clearly signal a company preparing for significant growth and more importantly - an initial public offering (IPO) sometime soon. Zooming out, the share sale and potential entry into the mortgage market demonstrate Revolut's ambition to become a full-service financial institution, challenging traditional banks across multiple product lines. The success of its mortgage offerings in Ireland, if approved, could serve as a template for expansion into other countries' mortgage markets. More importantly, the outcome of Revolut's long-standing application for a UK banking license will be crucial to watch, as it could significantly impact the company's operations in one of its largest markets.

Apple unlocks iPhone payments in a landmark EU deal ??????

The BIG news ??? Tech titan Apple has just reached a landmark agreement with European Union regulators to open up its mobile payment system to rival companies, marking a significant shift in the tech giant's approach to competition in the digital payments space.

Let’s take a closer look at this, see what it’s all about and what’s next.

More on this ?? The deal, which resolves a four-year antitrust investigation by the European Commission, requires Apple to allow third-party developers access to the Near-Field Communication (NFC) technology that enables contactless payments on iPhones.

This change will allow competing mobile wallet providers to offer tap-and-go payment services on iOS devices, breaking 苹果 's monopoly on this functionality.

Key points of the agreement include:

• Apple will provide free access to NFC APIs for third-party developers.
• Users will be able to set a default mobile wallet of their choice.
• Competing wallets will have access to iPhone features like Face ID for authentication.
• The commitments will be legally binding for 10 years and cover the European Economic Area.
• Implementation deadline is set for July 25, 2024.

This decision is expected to foster innovation and increase competition in the mobile payments sector. It addresses concerns raised by the EU that Apple was unfairly restricting access to its payment technology, potentially stifling competition and limiting consumer choice.

Future impact ?? The implications of this deal extend far beyond Apple and the EU. It sets a precedent that could influence similar regulatory actions globally, potentially forcing Apple to make similar concessions in other markets, including the United States where the company faces antitrust scrutiny too.

For the FinTech industry, this opens up new opportunities for innovation and competition in mobile payments. Banks and financial service providers can now develop their own NFC-enabled payment solutions for iPhones, potentially reducing their reliance on Apple Pay and its associated fees.

Consumers are likely to benefit from increased choice and potentially lower costs, as competition may drive down transaction fees and lead to more innovative features in mobile payment apps.

?? THE TAKEAWAY

What’s next? ?? Looking ahead, we can (hopefully) expect to see a surge in new mobile wallet offerings for iOS users in Europe. Banks and FinTech companies will likely race to develop and promote their own NFC payment solutions. This could lead to a fragmentation of the mobile payments market in the short term, but may ultimately drive innovation and improve services for consumers. Apple, while maintaining its hardware ecosystem, may need to focus more on improving its own payment services to stay competitive (i.e. remember the recent BNPL deal with Affirm ). This could thus lead to enhancements in Apple Pay and potentially new financial services offerings from the company. Zooming out, this deal may serve as a catalyst for a broader shift in how tech giants approach platform control and interoperability, potentially leading to more open ecosystems across the tech industry.

ICYMI: Deal of the year: Affirm partners with Apple Pay to expand BNPL reach ???? [why it’s a deal of the year, what it means for both giants + a bonus deep dive into Affirm and why it’s about time to be very bullish on them]

Extra Reads & Quick Bites for Curious Minds ??

• Nuvei Partners with Mastercard for Seamless Crypto to Fiat Conversion ???? Nuvei has partnered with 萬事達卡 to launch a new off-ramping solution, enabling consumers in Europe to convert digital assets to fiat currency via prepaid, credit, and debit cards. This functionality bridges digital and traditional finance, allowing consumers to spend converted funds via Mastercard's global network. The off-ramping solution is integrated into Nuvei's modular payment platform, providing a simple, secure user experience. Consumers can quickly convert supported digital assets into fiat and transfer funds to their eligible Mastercard debit, credit, or prepaid card in near real-time. This partnership simplifies the off-ramping process, eliminating the need for third-party exchanges or money service businesses. ICYMI: ICYMI: Nuvei to go private in $6.3B acquisition by Advent International ?? [why it makes sense & what can we expect next]
• Banco Santander and Google Offer Free AI Training for All ???? Banco Santander and Google have partnered to provide a free AI course, Santander | Google: Artificial Intelligence and Productivity, available on the Santander Open Academy platform in English, Spanish, and Portuguese. The course aims to help participants over 18 boost productivity, learn AI basics, automate tasks, and develop problem-solving skills. The course covers AI fundamentals, practical applications, and effective commands for AI tools. Upon completion, participants receive a certificate endorsing their new skills.
• NatWest Expands Digital ID Service to Nordics ???? NatWest is making its digital identity service for legally binding documents via Adobe Acrobat Sign available to customers in Sweden, Finland, and Norway. The bank will use OneID's bank-verified digital identity solution for its Structured Finance business in these countries. Any individual with online banking in the UK, Sweden, Finland, or Norway can verify their identity using their local bank ID before signing a NatWest leasing agreement. The switch to OneID's global integrated system follows NatWest's review of its existing verification processes for document and contract signing in the Nordics. NatWest first introduced OneID to streamline its Customer Attribute Sharing service for UK businesses last year.

Money Moves ??

• Coinbase Ventures, the corporate venture capital arm of crypto exchange Coinbase, has invested $1M in a strategic funding round for Ampleforth Foundation’s decentralized low-volatility commodity money, SPOT.
• Goldman Sachs has led a $36M Series C funding round in the alternative investment data platform Canoe Intelligence.
• Tread.fi, an algorithmic crypto trading platform founded by a former Morgan Stanley employee, has raised $3.5M in a pre-seed funding round.

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 a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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