All Access

Fintech Deals

Standard

Fintech Deals Alerts

Alert

Fintech Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Private Credit

BFD Expert Voices

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

pittsburgh

atlanta

san-diego

charlotte

boulder

washington-dc

kansas-city

dallas

denver

detroit

des-moines

austin

boston

chicago

cleveland

columbus

houston

indianapolis

miami

nashville

new-orleans

nw-arkansas

philadelphia

phoenix

portland

richmond

salt-lake-city

san-antonio

san-francisco

seattle

tampa-bay

twin-cities

raleigh

huntsville

colorado-springs

axios-local

axios-pro

axios-live

the-axios-show

BlockFi's $100 million settlement on Monday could have broader implications for the crypto lending industry.

Why it matters: High-yield crypto savings accounts — marketed as an inflation hedge and a less-risky way to invest in digital assets — have become popular in the sector.

Gemini, Circle, Celsius, Voyager, and Crypto.com all offer various types of high-yield crypto products. 

Bloomberg reported last month that some of those companies are under investigation by the SEC, which suggests more enforcement action to come.

The background: BlockFi agreed to pay a $100 million fee to settle allegations from the SEC and state regulators that it violated securities law and misled investors about the risks related to its high-yield crypto savings accounts.

In charging BlockFi, the SEC explicitly stated it views these types of accounts as securities and that they should be regulated as such. 

What it means: Industry pundits cheered the decision for providing a regulatory roadmap for offering these products — and for showing the agency is open to allowing such services at all. 

Still, the devil is in the details for how crypto lenders eventually reach compliance.

What they're saying: Seward & Kissel's Philip Moustakis, a former senior counsel in the SEC's Enforcement Division, said he would not be surprised if that division were to announce a crypto lending initiative to bring the rest of the industry into compliance.

He said that initiative could include a "template settlement that respondents will receive if they come forward, cooperate, remediate, and agree to come into compliance."

Yes, but: Crypto supporters have long argued that existing regulatory frameworks don't fit perfectly into this new world, and believe that enacting onerous regulations could deter web3 innovation. 

In a dissenting statement on the BlockFi case, SEC Commissioner Hester Peirce wrote, "Rather than forcing transparency around retail crypto lending products, today’s settlement may stop them from being offered to retail customers in the United States."

What we're watching: BlockFi has already announced that it intends to register a new lending product to be offered and sold under existing securities laws. 

That leaves BlockFi with at least one more hurdle to jump through — showing the SEC that the product will be compliant, while also still offering attractive yields in the face of greater regulation.

1 big thing: BlockFi's settlement spillover 

Illustration of a crypto coin pixelating and gradually disappearing

Spanish multinational bank BBVA is placing a big bet on Brazil with a $300 million investment in Neon, a neobank.

Why it matters: Big financial institutions still see an opportunity for growth in Latin America, an area where digital banking startups are taking off.

Details: BBVA is investing $300 million for a 21.7% stake in Brazil's Neon, adding to a stake it acquired in 2018 through its VC arm Propel. Following this transaction, BBVA will hold about 30% of the company.

Context: BBVA has operations throughout Latin America — including Argentina, Colombia, Mexico, Paraguay, Peru, Venezuela, and Uruguay — but notably didn't have exposure to the Brazilian retail banking sector.

The neobank market in Brazil has expanded rapidly, led by now-public Nubank. It also includes C6, which sold a 40% stake in its business to JPMorgan last summer.

Neon claims to have 15 million registered customer accounts, which compares to the 48 million Nubank claimed last October (though it's worth noting not all of them are in Brazil). C6, meanwhile, claimed 7 million customers at the time of the JPM investment.

BBVA notes that Brazil is home to 210 million potential customers.

2. The BFD: Brazil’s potential lures BBVA

Illustration of an upward pointing arrow made from Brazilian coins

Better Tomorrow Ventures, a fintech-focused early stage venture firm headed by NerdWallet co-founder Jake Gibson and ex-500 Startups partner Sheel Mohnot, raised $150 million for a sophomore fund and $75 million for an opportunity fund, per our Axios colleague Kia Kokalitcheva.

Why it matters: Fintech remains a red-hot sector in private markets, despite the public market sell-off, with new funds in the space still raising.

Taylor Greene earlier this month launched a $50 million seed fund dubbed Twelve Below to invest in fintech, among other things.

"Valuations are up like 20% since we started investing, so we need more capital to get same ownership size," Mohnot says of raising a new fund that's twice as big as the first one in 2020. 

Meaning, sell-off or not, he's expecting to pay more for deals.

3. Expecting a more expensive tomorrow

Illustration of a one-dollar bill with George Washington holding a glass of red wine.

Discover brings QR codes to merchants (WSJ)

Behind competitors Visa and Mastercard in the credit card game, Discover is launching the option for merchants to accept payments directly from buyers' bank accounts. 

The tech is made available via partnership with Buy It Mobility Networks, a fintech.

The National Football League lobbied the SEC on blockchain-related issues last year. In total, the league spent $600,000 on both chambers of Congress and various government agencies on the topic.

Fincen recovered $1.1 billion in the last seven years (Fincen)

The U.S. Treasury Department’s Financial Crimes Enforcement Network had a hand in recovering some $1.1 billion in the last seven years.

4. Credit score

Illustration of a credit score meter with emoji faces showing sad, neutral, and happy emotions.

 • MoneyGram International (NASDAQ: MGI), a P2P payments company, will go public via Madison Dearborn Partners in a deal valuing it at $1.8b. http://axios.link/zhbU

 • Spectrum Equity invested $200m in RapidRatings, a New York City-based provider of financial health data and analytics. spctrm.pe/RapidRatings

 • Payhawk, a U.K.-based corporate spend management company, is raising $100m at a $1b valuation. Lightspeed Venture Partners is said to be leading. http://axios.link/udqX

 • FIS acquired Payrix, an embedded payments company. Investors in Payrix included PSG and Blue Star Innovation. http://axios.link/B11u

• Akulaku, an Indonesian online lender backed by Jack Ma’s Ant Group, raised $100m from Siam Commercial Bank. http://axios.link/IDGC

• Rainbow, an Ethereum wallet, raised $18m in Series A funding led by Alexis Ohanian’s Seven Seven Six. http://axios.link/ZmKt

• Mundi, a financial services platform for cross-border trade, raised $16m in a Series A funding round led by Union Square Ventures. http://axios.link/XiK8

• Trace Finance, a Brazilian cross-border banking startup, raised a $4.3m seed funding round led by HOF Capital with participation from Circle Ventures, The Chainsmokers, and others. http://axios.link/3WFH

• MoneyHash, an Egypt- and U.S.-based payments API firm, raised $3m in pre-seed funding from investors Ventures Platform, Kepple Africa Ventures, LoftyInc Capital and COTU Ventures. http://axios.link/ZfPi

5. Deals of the day

 • Paradigm added Justin Slaughter as policy director. He was previously director of the office of legislative and intergovernmental affairs and senior advisor to acting Securities and Exchange Commission chair Allison Herren Lee. Paradigm.xyz

6. It's personnel

Good morning, Fintech Deals readers! Happy Tuesday.

Situational awareness: Lots of people are calling Super Bowl LVI the “crypto bowl,” but maybe it was actually the “Plaid bowl”?

According to CTO Jean-Denis Greze, half a million people signed up for a fintech app on Plaid, with the API serving up 3,000 requests each second.

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

February 15, 2022

1 big thing: BlockFi's settlement spillover