1 big thing: Goldman Sachs leads crypto round

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2. The BFD: From PayPal to Infinity

3. Credit score

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4. Deals of the day

5. It's personnel

Situational awareness: Cathie Wood's Ark Invest snapped up about $30 million in Coinbase shares as the stock fell.

Tell your fintech friends, family, crypto pals and others about this newsletter. They can sign up here.

Fintech Deals

1 big thing: Hiring pullback 

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2. The BFD: Pay back 

3. Celsius preps to IPO its mining subsidiary

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Situational awareness: Revolut CEO Nik Storonsky has launched a $200 million venture fund that plans to use A.I. in its investing decisions.

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1 big thing: Cracks in crypto

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2. The BFD: Valuation drop

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Hi, fintech readers. We're getting at it bright and early today.

Situational awareness: Tune in to part 5 of Axios' podcast "How It Happened: Putin's invasion." 

1 big thing: Mark Goldberg is into consumers

2. The BFD: Kyriba on the block

3. The path of crypto cash

Situational awareness: Hashed, an early-stage venture firm, disclosed a $3.5 billion hit from its luna holdings.

1 big thing: What does SBF want with Robinhood?

Photo illustration of Sam Bankman-Fried with a Robinhood logo tucked behind his ear.

2. The BFD: a16z backs ex-Meta crypto chief

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Hello, fintech readers. It's Friday the 13th. 👻

Situational awareness: Coinbase users got a scare yesterday when the crypto exchange experienced outages amid the market rout. "The underlying issue that caused difficulties is resolved," the company later tweeted.

Inflation, rising interest rates, and a shaky global economy were all hot topics at this year's annual Milken Institute Global Conference, but growing institutional interest in crypto seemed to be on everyone's mind.

Why it matters: The advancement of cryptocurrency and web3 came up repeatedly throughout the three-day finance conference, even during interviews and panels that weren't devoted to new financial technology.

A few opinions on fintech, web3 and the metaverse from the conference:

Marc Rowan, CEO of Apollo Global Management

"There is now a fintech competitor at every point in the financial system, it doesn't matter what you do. That, for us, is a threat."

"But it's also a massive opportunity. Every one of these financial competitors has the same business model in some way: They want to be a toll taker, not a balance sheet. They don't want to own the asset."

"Therefore, for the right partners, we have the ability to go to them and become their balance sheet."

"For us, there are three criteria: We need an asset class that has consistent regulatory oversight. We need an asset class that has a store of value that’s more than just what someone else will pay for it. And we need an asset class where we understand the correlation between it and other asset valuations so we can put it into a portfolio."

"Now, most cryptocurrencies are 0-for-3." 

Scott Minerd, chief investment officer at Guggenheim Partners

"I think the world of crypto is real and virtual currencies are real, but it's the Wild West right now in terms of trying to sort out who the winners and losers are."

John D'Agostino, director of institutional sales at Coinbase

"If you think about where you were on cloud data storage 20 years ago, I think probably in 20 years you'll see that's where you are now on using blockchain technology for payment mechanisms, customer engagement and lending."

"In a few years nobody will be talking about NFTs, they'll be talking about the products that are encompassed in those NFTs, just like we don't talk about surfing the web anymore. I think these will just become part of the fabric of everyday life." 

Alexis Ohanian, founder of Seven Seven Six

"[Zuckerberg’s metaverse] is like AOL. Thank God we didn't all end up on AOL — we use the internet now. I think it's going to play out the same way with Meta."

Crypto consumes the Milken conference

Cryptocurrencies

Inflation, rising interest rates, and a shaky global economy were all hot topics at this year&#x27;s annual Milken Institute Global Conference, but growing institutional interest in crypto seemed to be on everyone&#x27;s mind.Why it matters: The advancement of cryptocurrency and web3 came up repeatedly throughout the three-day finance conference, even during interviews and panels that weren&#x27;t devoted to new financial technology.

National

Sen. Cynthia Lummis (R-Wyo.) outlined plans at an Axios virtual event to release bipartisan legislation that creates a framework for regulating digital assets. Lummis  in an Axios virtual event focused on the future of crypto adoption. 

The virtual event, on the future of crypto adoption, also featured Tomicah Tillemann, the global chief policy officer at VC firm Haun Ventures. 

Why it matters: Crypto is a $1.8 trillion industry, but it's currently operating in murky regulatory waters. The legislation that Lummis discussed aims to clear up the ambiguity. 

Details: Sens. Lummis and Kirsten Gillibrand (D-N.Y.) are expected to release the draft legislation as soon as this month.

The bill will be introduced as one comprehensive piece of legislation, Lummis says, "so people can see the big picture, how the commodities components work with the securities components, with stablecoins and with a potential CBDC."

But she notes the bill will likely be broken up into five or six distinct parts that will be reviewed through relevant committees — so the CFTC piece will go to the AG Committee, the securities component will go to the Banking Committee, and the taxation component will go to the Finance Committee.

The intrigue: Despite a 50-50 split in the Senate, Lummis says she is confident a crypto bill can get passed because "digital assets are a nonpartisan issue."

"We're finding this is an area where we're seeing a lot of common ground among members that maybe on a partisan basis you wouldn't put together that way. We're going to have a very bipartisan approach to this issue," she says.

Of note: The sense Haun's Tillemann agreed that regulators are beginning to take crypto seriously. 

"If you would have asked me 12 months ago what the State of the Union was on this question, I would have responded that we are in a race to build the future of the Internet... and the U.S. is not only losing it, but most of our policymakers are even aware that a race is underway." he said at the event. "That is changing now."

Sen. Lummis confident in bipartisan crypto legislation

The legislation aims to seek clarity in regulating cryptocurrencies

Fintech

Sen. Cynthia Lummis (R-Wyo.) outlined plans at an Axios virtual event to release bipartisan legislation that creates a framework for regulating digital assets. Lummis in an Axios virtual event focused on the future of crypto adoption. <ul><li>The virtual event, on the future of crypto adoption, also featured Tomicah Tillemann, the global chief policy officer at VC firm Haun Ventures. </li></ul>

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Aquiline Capital Partners has closed on $365 million to invest in fintech startups through the second iteration of its venture fund, Aquiline Technology Growth (ATG) Fund II.

Why it matters: Despite a retrenchment in the public markets, VCs and LPs — particularly those in the financial services industry — remain bullish on the fintech space.

The funding nearly doubles the capital the team has to deploy from the previous fund, ATG I, and comes in above the firm's $300 million target.

Details: Aquiline has private equity, credit financing, and venture teams, but ATG is focused specifically on investing in early-stage fintech, insurtech, and related enterprise software startups.

The firm looks for startups with at least $1 million in ARR and makes equity investments between $3 million and $25 million.

It takes minority positions and will lead or co-invest, depending on the opportunity, and has made 27 venture investments through two funds to date. 

Between the lines: Given its relationships in the financial services and insurance industries, the firm is focused on identifying companies in the B2B space solving pain points for those markets. 

It also pitches its ability to connect startups with potential partners and customers as its key value prop when making investments.

The bottom line: Based on investor interest, there are still plenty of opportunities for innovation in the financial services sector.

Exclusive: Aquiline raises $365M fund for fintech venture investments

VCs and LPs remain bullish on the fintech market

Illustration of a package wrapped in blank checks. 

Aquiline Capital Partners has closed on $365 million to invest in fintech startups through the second iteration of its venture fund, Aquiline Technology Growth (ATG) Fund II.Why it matters: Despite a retrenchment in the public markets, VCs and LPs — particularly those in the financial services industry — remain bullish on the fintech space.

The non-profit governance organization behind TerraUSD (UST), the third-largest stablecoin by market cap, is taking measures to shore up its stability after getting knocked off its dollar peg. 

Why it matters: In theory, algorithmic stablecoins are supposed to be self-regulating, but volatility surrounding UST has called that into question.

Driving the news: UST fell off its dollar peg on Saturday, going as low as $0.985 before rebounding to $0.995.

The Luna Foundation Guard (LFG), which oversees all things related to Terra, has since voted to lend $750 million in bitcoin and $750 million in UST to over-the-counter market makers to keep the stablecoin pegged to $1. 

How it works: Unlike stablecoins such as Tether's USDT or Circle's USDC, UST is not governed by a centralized organization or backed by other assets.

Instead, it maintains its peg to the dollar through a mint-and-burn mechanism using the Terra ecosystem’s governance token, LUNA.

It lets people redeem 1 UST for $1 worth of LUNA, burning the UST in question and removing it from circulation during the transaction. 

Whenever 1 UST isn't equal to $1, traders can swap the UST for the $1 in LUNA, making a small profit and rebalancing the stablecoin peg.

Yes, but: UST dropped over the weekend as traders sold it in exchange for other stablecoins.

Of note: This all comes as other stablecoins like tether have faced questions over what they're actually backed by.

What we're watching: How regulators approach algorithmic stablecoin governance in a decentralized finance world.

After all, it's one thing to regulate centralized stablecoin issuers like USDC's Circle, but a whole different animal to manage a decentralized and algorithmic stablecoin like UST.

Editor's note: This story has been updated to fix a typo in the headline.

Luna Foundation Guard stabilizes TerraUSD stablecoin

Algorithmic stablecoins are supposed to be self-regulating

Illustration of a glitching digital coin with binary code on it.

The non-profit governance organization behind TerraUSD (UST), the third-largest stablecoin by market cap, is taking measures to shore up its stability after getting knocked off its dollar peg. Why it matters: In theory, algorithmic stablecoins are supposed to be self-regulating, but volatility surrounding UST has called that into question.

A trio of investors from PayPal Ventures has set out on their own with a $158 million inaugural fund devoted to investing in fintech and commerce enablement startups, Axios reports.

Why it matters: Despite a pullback in the public markets, there's still a healthy appetite for investing in early-stage fintech companies, particularly in international markets. 

Driving the news: Infinity Ventures was founded by Jeremy Jonker, who led PayPal's venture and corp dev functions for a number of years, along with managing partners Jay Ganatra and Mario Ruiz.

While at PayPal, the team led early-stage investments in startups like Plaid, Divvy, Acorns, Happy Returns, and Paidy, as well as growth-stage deals with companies like MercadoLibre, GoJek, and Uber.

They were also behind some of the largest M&A deals at PayPal, including the acquisitions of Venmo, Braintree, Honey, Hyperwallet, Xoom, Swift Financial and iZettle.

Of note: While based in the U.S., Infinity Ventures is on the lookout for startups solving fintech problems all over the world.

"At PayPal Ventures, 70% of our capital deployed was in international markets, which is a big thing because we're building a global platform here," Jonker says.

Details: The firm will invest in early-stage fintech or commerce enablement startups — pre-seed through Series A — with initial checks ranging from $500,000 to $8 million.

Infinity Ventures plans to lead or co-lead about 25 deals through its inaugural fund, with a 10% ownership target and an expectation for follow-on investments in later rounds.

The team began writing checks last summer and already has made about a dozen investments into startups that include Card91, Durable, Glean, Mendel, Neo.tax, Pagos, Replo, Sensible Weather, Skipify, and Upside.

The intrigue: Fintech companies are struggling mightily in the public markets. But the team at Infinity says that pullback hasn't really impacted the early stage market they play in.

They also point out that a downturn isn't necessarily the worst time to invest, noting that both Stripe and Square (now Block) were both founded in 2009, in the wake of the last financial crisis.

"We're investing for the next five to 10 years, if not longer. So you could argue we're a little immune to this correction," Jonker says.

Exclusive: PayPal vets launch Infinity Ventures, a $158M fintech fund

The firm will invest in pre-seed through Series A

Illustration of a row of laptops with binary code, money and circles.

A trio of investors from PayPal Ventures has set out on their own with a $158 million inaugural fund devoted to investing in fintech and commerce enablement startups, Axios reports.Why it matters: Despite a pullback in the public markets, there&#x27;s still a healthy appetite for investing in early-stage fintech companies, particularly in international markets. Driving the news: Infinity Ventures was founded by <a class="gtmContentClick" data-vars-link-text="Jeremy Jonker" data-vars-click-url="https://www.linkedin.com/in/jeremyjonker/details/experience/" data-vars-content-id="a4bd65be-699f-4974-aa0c-e66484cc58e0" data-vars-headline="Exclusive: PayPal vets launch Infinity Ventures, a $158M fintech fund" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.linkedin.com/in/jeremyjonker/details/experience/" target="_blank">Jeremy Jonker</a>, who led PayPal&#x27;s venture and corp dev functions for a number of years, along with managing partners <a class="gtmContentClick" data-vars-link-text="Jay Ganatra" data-vars-click-url="https://www.linkedin.com/in/jayganatra/" data-vars-content-id="a4bd65be-699f-4974-aa0c-e66484cc58e0" data-vars-headline="Exclusive: PayPal vets launch Infinity Ventures, a $158M fintech fund" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.linkedin.com/in/jayganatra/" target="_blank">Jay Ganatra</a> and <a class="gtmContentClick" data-vars-link-text="Mario Ruiz" data-vars-click-url="https://www.linkedin.com/in/mariorruiz/" data-vars-content-id="a4bd65be-699f-4974-aa0c-e66484cc58e0" data-vars-headline="Exclusive: PayPal vets launch Infinity Ventures, a $158M fintech fund" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.linkedin.com/in/mariorruiz/" target="_blank">Mario Ruiz</a>.<ul><li>While at PayPal, the team led early-stage investments in startups like Plaid, Divvy, Acorns, Happy Returns, and Paidy, as well as growth-stage deals with companies like MercadoLibre, GoJek, and Uber.</li><li>They were also behind some of the largest M&amp;A deals at PayPal, including the acquisitions of Venmo, Braintree, Honey, Hyperwallet, Xoom, Swift Financial and iZettle.</li></ul>Of note: While based in the U.S., Infinity Ventures is on the lookout for startups solving fintech problems all over the world.<ul><li>&quot;At PayPal Ventures, 70% of our capital deployed was in international markets, which is a big thing because we&#x27;re building a global platform here,&quot; Jonker says.</li></ul>Details: The firm will invest in early-stage fintech or commerce enablement startups — pre-seed through Series A — with initial checks ranging from $500,000 to $8 million.<ul><li>Infinity Ventures plans to lead or co-lead about 25 deals through its inaugural fund, with a 10% ownership target and an expectation for follow-on investments in later rounds.</li><li>The team began writing checks last summer and already has made about a dozen investments into startups that include Card91, Durable, Glean, Mendel, Neo.tax, Pagos, Replo, Sensible Weather, Skipify, and Upside.</li></ul>The intrigue: Fintech companies are struggling mightily in the public markets. But the team at Infinity says that pullback hasn&#x27;t really impacted the early stage market they play in.<ul><li>They also point out that a downturn isn&#x27;t necessarily the worst time to invest, noting that both Stripe and Square (now Block) were both founded in 2009, in the wake of the last financial crisis.</li><li>&quot;We&#x27;re investing for the next five to 10 years, if not longer. So you could argue we&#x27;re a little immune to this correction,&quot; Jonker says.</li></ul>

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Exclusive: PayPal vets launch Infinity Ventures, a $158M fintech fund

Luna Foundation Guard stabilizes TerraUSD stablecoin

Crypto consumes the Milken conference

Exclusive: Aquiline raises $365M fund for fintech venture investments

Sen. Lummis confident in bipartisan crypto legislation

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Fintech: Love thy consumers

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Fintech: Coinbase slows hiring

Fintech: Goldman's crypto hand

Fintech: Samholder activist