News Briefing - Crowdfunding, SME And Alternative Finance


1. UK – FinTech 


AltFi looks at the FinTechs that have left Britain ahead of Brexit.

2. US – FinTech 

Crowdfund insider reports: 

“Peter Van Valkenburgh, the Director of Research at Coin Center, a leading non-profit entity focused on the latest policy issues facing digital currencies, notes that during the past few years we’ve seen countries like Switzerland, Singapore, and the Netherlands adopt a technology-focused approach to regulating transactions involving “unhosted” cryptocurrency wallets. 

Valkenburgh confirmed that the Financial Action Task Force (FATF) identified (potential) future measures in order to address peer to peer (P2P) transactions, which includes the possibility of banning or restricting access to certain wallets. 

Valkenburgh pointed out these proposals have been “in the air” throughout this year. As US lawmakers keep reviewing various options with respect to cryptocurrencies and anti-money laundering (AML) regulations, these types of proposals are on the table. 

According to the Coin Center Research Director: 

“Those options are bad. They are drags on innovation, they unnecessarily limit the rights of citizens, and they are not technology neutral. Fortunately, these are not the policies proposed by the Treasury today. However, there are issues with this proposal, it’s rushed and has complicated new counterparty identification requirements that may be infeasible and innovation-killing in the context of cryptocurrency networks.” 

He confirmed that Coin Center “strongly” prefers that no changes be made to the “currency state” of AML policy. He added that the organization is “gratified” that the United States hasn’t decided to repeat the same mistakes made by other governments. Instead, American policymakers have mainly suggested “an extension of rules that already apply to traditional financial institutions dealing in cash, albeit with complications,” Valkenburgh claims. 

He added: 

“The proposal announced [on December 18, 2020] is that transactions from regulated exchanges to individual wallets not subject to regulation (as well as unregulated foreign exchanges) should be subject to an existing automatic reporting requirement: Currency Transaction Reports (CTR) for cash transactions.”  

Valkenburgh continued: 

“CTRs are a form of warrantless search and seizure of private financial records. Fifty years ago, the Supreme Court narrowly upheld the constitutionality of these reporting requirements, arguing that Americans lose their right to a warrant with individual suspicion when they hand their private information over to third parties.” 


3. International – FinTech 

Finextra reports:


“The US Securities and Exchange Commission is gearing up to take enforcement action against Ripple and its digital asset XRP. 

Ripple has long faced allegations that XRP - the foundationaly cryptocurrency used to grease the wheels of it blokchcain-based remittance network - is in fact a security owned and controlled by the firm.

Ripple is currently in a legal battle with investors who say it is selling unregistered securities and making misleading statements about XRP.

If XRP is labelled a security, it would be subject to strict rules that would impact Ripple, which still owns more than half of all the cryptocurrency.

Ripple has pre-empted the SEC enforcement action with a string of rebuttals on its website and twitter, amid hints that it is prepared to move its business to a more amenable country such as the UK or Japan, where the FSA has already ruled on XRP's status as a cryptocurrency.

The firm contends the SEC’s theory, that XRP is an investment contract, "is wrong on the facts, the law and the equities.

"To prove its case amounts to an unprecedented and ill-conceived expansion of the Howey ​test and the SEC’s enforcement authority against digital assets."

Ripple points out that since 2017, around 90% of its XRP holdings have been held in an inaccessible escrow, which cannot be unilaterally terminated. The escrow is intended to standardize the supply of XRP that could come from Ripple, even during times when the price andvolumes of XRP have increased.

Ripple chief Brad garlinghouse contends that departing SEC chairman Jay Clayton is "taking notes from the Grinch this holiday season". 


4. International – FinTech 


The Fintech Times reports: 

“PayPal’s decision to enter the cryptocurrency market sent the value of Bitcoin soaring, but the announcement has garnered a less than exuberant response from the fintech community. 

PayPal account holders in the US will be able to buy, hold, and sell cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, within the PayPal digital wallet.  

PayPal will also expand the features to its P2P payment platform Venmo and select international markets in the first half of 2021 through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency services. 

In addition, the New York State Department of Financial Services (NYSDFS) granted PayPal a first-of-its-kind conditional ‘Bitlicense,’ a business licence that enables the company to conduct virtual currency activities.  

To mark the launch, PayPal will not charge any service fees for buying or selling cryptocurrency or for holding cryptocurrency in a PayPal account until 31 December 2020. 

PayPal said it wants ‘to increase consumer understanding and adoption of cryptocurrency’ and will also provide account holders with educational content to help them understand the cryptocurrency ecosystem. 

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” says Dan Schulman, president and CEO at PayPal. 

“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and interoperability of these new instruments of exchange.” 

Following the announcement, Bitcoin surged in price, ultimately overtaking the market cap of PayPal itself. Billionaire investor Mike Novogratz called it an ‘exciting day,’ the ‘biggest news of the year in crypto’ and hailed the ‘Rubicon crossed’ on Twitter. 

Writing in Forbes, David G.W Birch – the respected author, advisor and commentator on digital financial services – suggests that by gaining expertise in decentralised alternatives to commercial bank money, PayPal is being ‘very smart.’  

“PayPal must have started to think about the opportunities that will arise from the trading and management of digital assets (in the form of tokens) in the not-too-distant future,” writes Birch 

However, others are concerned that while PayPal says it is ‘eager to work with central banks and regulators around the world,’ for now, it is restricting users to purchasing cryptocurrencies on its platform. Plus, existing digital coin owners can’t transfer the contents of other digital wallets over to PayPal’s. 

Satoshi Labs, inventor of crypto hardware wallet Trezor, is less than impressed. It thinks PayPal is sending out mixed messages. 

In a team blog, it suggests that while PayPal’s announcement may bring a promise of greater regulation, consumers should not use PayPal for Bitcoin transactions. 

“Long-term, if PayPal proceeds without consulting the community and letting their users control their own keys, it offers no value to the space. The greatest risk is that the clout they carry in traditional electronic payments will be interpreted as expertise in crypto. This would threaten the expert advice so carefully crafted by our community, which could be drowned out by the misinformed masses that PayPal brings to the space.” 

David Gerard, author of Attack of the 50 Foot Blockchain and Libra Shrugged: How Facebook Tried to Take Over the Money, says he is ‘baffled that PayPal would offer this’ and asks: “Are they trying to get into the bored day-trader market that apps like Robinhood live off, except cryptos rather than stocks?” 

Meanwhile, Peter Smith, CEO at, adds: “PayPal’s decision is highly centralised and inflexible. We saw this with Robinhood, and we’re seeing it again today. Crypto is about financial freedom. It’s modern money that anyone anywhere can truly control. While we’re excited to see a new audience gain access, a non-custodial approach limits opportunity to self-custody your crypto or transact freely.” 

PayPal is currently inviting people to join the waitlist for its cryptocurrency services and while it’s clear this is a significant step forward for Bitcoin and cryptocurrencies, it remains to be seen how PayPal’s arrival on the scene will impact this category in the long term. 


5. International – FinTech/Real Estate 

Crowdfundinsider reports: 

“A Dubai-based real estate-focused Fintech firm is planning to offer local investors an opportunity to invest in the property market with as little as 2,000 AED (appr. $544). 

UAE-headquartered Stake, which is supported by a Saudi national, is currently based in the Fintech Hive which is located in the Dubai International Financial Center (DIFC). The company has been launched by co-founder Rami Tabbarra, a former SVP of Sales at developer DAMAC. Manar Mahmassani, a former MD at Falcon Group and VP at Deutsche Bank, is also a co-founder.”