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BFD Expert Voices - Private Credit

BFD Expert Voices

Crypto exchanges and platforms in Canada could soon be required to submit to surveillance to help securities regulators keep a closer eye on market activity, Axios Crypto's Crystal Kim writes.

Why it matters: If implemented, the proposal would be another example of how Canada's advances in crypto regulation could be the standard for other countries.

Driving the news: The British Columbia Securities Commission (BCSC) is floating a proposal for supervisory technology that would enable Canada's regulators to monitor an exchange's solvency and to watch for signs of wash-trading and front-running.

Canada has no securities regulator at the federal level, and the BCSC is one of over a dozen regulators for the country's provinces and territories. If the proposal is adopted, implementation would take a matter of weeks.

Zoom out: The proposal is tied to broader crypto regulatory changes introduced by Canada months ago, as a way to verify some of the information that regulators are requiring from companies.

Crypto marketplace operators have been required to file pre-registration undertaking forms and adhere to new guidelines inspired by lessons from FTX and Celsius.

Those prior changes caused a stir, with the world's largest exchange, Binance, and a few others exiting the country weeks after the announcement.

Reality check: The exodus was greatly exaggerated. Kraken, one of the oldest crypto exchanges, remains. And Coinbase — the largest in the U.S. — recently expressed its intent to launch in the country.

How it works: Inca will be the go-between for regulators and crypto exchanges, gathering and parsing information like exchange wallet addresses; data for customer funds and company funds; data feeds of every bid and ask; and anonymous trader IDs.

The data would be collected quarterly but would eventually get to near real time, according to Adam Zarazinski, CEO of Inca Digital.

Inca would not disclose personally identifiable information.

Inca, instead, uses anonymous trader IDs that would identify a person and their bid/ask orders in a market with a random string of numbers.

The bottom line: When something goes bump in equity markets, regulators want the skinny — down to who it was, when and how much. To what degree that standard will apply to crypto exchanges remains to be seen, but the BCSC's request is a step in that direction.

1 big thing: Canada wants eyes on crypto

Illustration of a pattern of eyes and pixelated coins.

Private equity firm Motive Partners has taken a majority stake in With Intelligence, a data analytics provider to the asset management industry, for £400 million, Ryan writes.

Why it's the BFD: Investors see a need for better data around alternative assets as the private markets move toward an estimated $15 trillion of assets under management by 2027.

Details: Motive, a PE firm specializing in fintechs, will take the reins of With Intelligence from Intermediate Capital Group (ICG).

Motive plans to bring in members of its operating team to collaborate with the data analytics firm, including BNY Mellon's former CEO of data and analytics Charles Teschner and Wilshire CEO Andy Stewart.

ICG will remain a minority shareholder and has agreed to invest alongside Motive to accelerate the company's growth.

Between the lines: Terms were not disclosed, but Ryan confirms the takeover had a price tag of £400 million, which Sky News originally reported.

Motive reportedly beat out Cinven and Flexpoint in bidding for With Intelligence.

Context: Founded in 1998, With Intelligence specializes in providing data analytics around alternative assets — such as hedge funds, private credit, private equity and real estate — to the asset management industry, 

ICG acquired the firm, then known as Pageant, for over £100 million in early 2020.

With Intelligence grew to more than 2,500 customers with a revenue CAGR of 33%.

Of note: Houlihan Lokey served as financial adviser to With Intelligence, with other advisers including Proskauer, Alvarez & Marsal, and OC&C. 

Motive Partners' financial adviser was Raymond James, and they were also advised by MDW Capital Advisory, White & Case, Plural Strategy, Oliver Wyman, and EY.

2. The BFD: With Intelligence taken over for £400M

Illustration of stacks of money progressively getting larger with the last one so tall that it goes off screen. 

DOJ and FTC release new draft merger guidelines (Axios)

Antitrust regulators' frustrations with Big Tech are evident in a new draft of the Department of Justice and Federal Trade Commission's proposed joint merger guidelines released yesterday morning, Axios' Kia Kokalitcheva writes.

Inside the private writings of Caroline Ellison (NYT)

The former Alameda Research CEO and sometime girlfriend of Sam Bankman-Fried recorded many of her thoughts in Google Docs, making observations about her personal and professional life.

India and Singapore link UPI and PayNow (TechCrunch)

The new synergy will enable Indian users to remit up to 1,000 Singapore dollars a day. The move comes as established cross-border payment methods have been criticized for high fees.

Three bright spots in fintech secondaries (TechCrunch)

Just three fintech startups have seen their secondary valuations increase since January 2022: Rippling, Gusto and Deel, per Notice.co. Rippling is up by 103% (to $13.2 billion); Gusto by 5% (to $10 billion) and Deel by 37% (to $6.5 billion).

3. Credit score

Illustration of an exam answer sheet with the words "credit score" hand written in red ink.

Looking for more deal insights? Search the Axios Pro Deals Tracker beta.

• Cosmic Wire, a Miami-based blockchain startup, raised $30m in seed funding led by Solana and Polygon. www.cosmicwire.com

• Collectly, a Santa Monica, California-based patient financial engagement software company, raised $29m in Series A funding led by Sapphire Ventures, with YC, Wayfinder Ventures, Burst Capital, Cabra VC, and Davidovs VC also participating. https://www.collectly.co/

• P0x Labs, a privacy-preserving protocol running on the Polkadot blockchain, raised a $25m Series A funding round at a $500m valuation. Polychain Capital and Qiming Venture Partners led and were joined by Alliance, CoinFund, and SevenX Ventures. https://axios.link/43xuQnA

• Cymbal, a blockchain analysis tool maker, raised $18.5m in funding from Patron, GV, Acrew, First Round Capital, Coinbase Ventures, Solana Ventures, CAA Connect and UTA Ventures. https://axios.link/43w56ba

• Radiant Capital, a cross-chain lending and borrowing protocol, raised $10m from Binance Labs. https://axios.link/3Oo0dN5

• Portrait Analytics, a Boston-based generative AI platform for investment research, raised $7m led by Unusual Ventures, with participation from 406 Ventures. https://axios.link/3XWo6OR

• MyCover.ai, a Nigerian insurtech, raised $1.25m in pre-seed funding led by  Ventures Platform with participation from Founders Factory Africa and follow-on investor Techstars. https://axios.link/3rAjFNA

• Sequoia Financial Group agreed to acquire Cirrus Wealth Management, a Cleveland-based wealth management firm. www.cirruswealth.com

• Placeholder, a New York-based crypto venture firm, is seeking $200m for its third fund, per an SEC filing.

4. Deals!

• Alexander Kassai and Fredrik Strömqvist joined Swedish open payments fintech Brite Payments as COO and CFO, respectively. https://axios.link/3rtPfwe

• Scott Peyree joined LendingTree as COO and president of marketplace businesses following the departure of J.D. Moriarty. https://axios.link/3XXd77O

• Mark Jennings, a former Kraken executive, has joined Kraken's U.K.-based derivatives subsidiary Crypto Facilities as CEO. https://axios.link/3O1x0pD

• Effie Datson joined Chia Network's board of directors. https://axios.link/44U8Fc4

5. It's personnel

Situational awareness: The Fed launched its long-awaited FedNow system today. To start, only 35 of the thousands of banks and financial institutions in the U.S. will participate.

@Ryan is tired of the NBA's player empowerment era.

Thanks to George Moriarty and Rob Reinalda for today's edits.

And thanks to you for reading. Please tell your fintech friends about this newsletter. They can sign up here.

July 20, 2023

1 big thing: Canada wants eyes on crypto