The Fintech Files: The Tories’ £500,000 crypto donation, Jay-Z’s Bitcoin camp for kids, Klarna’s drop

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After nearly a fortnight of volatile swings, bitcoin stabilized at just over $20,000. And while the future is by no means clear, things seem a bit more stable – for now.

This will surely please the British government, which hitched up his wagon to the area in April. But like Financial news revealed on June 17, which came shortly after a massive £500,000 donation to the Conservative Party by prominent crypto investor Christopher Harborne.

The news comes after warnings from the Financial Conduct Authority and the Bank of England about the dangers of cryptocurrencies. Andrew Bailey, Governor of the Bank of England, even called cryptocurrencies “the new front line” for criminal scams and warned that they had “no intrinsic value”.

Labor called the donation a “shocking revelation” and accused the Tories of “guarding the interests of their wealthy donors”. The Conservatives said there was no link between party donations and government policy.

Crypto Crash Overview

The chaos could resume at any moment if another domino in the wider ecosystem falls. GlobalBlock analyst Marcus Sotiriou told FN last week: “We are now seeing the impact of human greed and people are over-indebted. I don’t think it stops there.”

As of June 21:

Celsius Network customers still cannot withdraw or trade on the lending platform. He warned that this process will take “some time”, having hired restructuring lawyers to help him solve his growing financial problems.

Three Arrows Capital, the Singapore-based crypto hedge fund, told the Wall Street Journal that it has hired legal and financial advisers to help find a solution for its investors and lenders, after being beaten earlier this month. .

Hoo, a Hong Kong crypto lender, has temporarily suspended withdrawals as it seeks a way to pay its customers, it announced in a June 17 blog post.

AEX, another crypto exchange, limited withdrawals for 36 hours, blaming “a bank over $1 billion”.

Babel, another Hong Kong-based lender, took a similar step on June 17 – but has since reached a preliminary agreement on restructuring its debt, easing some of the company’s short-term liquidity pressure.

As always, email me at [email protected] if you have anything else to add to the list.

The bankers have the bit between their teeth

Bankers who left traditional finance to be greeted by a new crypto winter could be forgiven for getting cold feet.

But some who have made the switch in the past year have said FNthey have no regrets. It’s not about ‘HODL’ or ‘buying the dip’ – terms used by crypto evangelists as prices plunge – but about longer-term faith in crypto and belief that the sector needed an upheaval, four people who jumped into space say FN.

Kyle Downey, who left a 17-year career at Morgan Stanley in October to launch New York-based digital asset firm Cloudwall Capital, said: “I never looked back, not a day.”

Klarna winners and losers

One of the markets’ big winners recently has been Mandeep Manku, a former Deutsche Bank executive who now runs activist investment firm Coltrane Asset Management.

The company took a large short position in UK investment trust Chrysalis Investments, whose portfolio is made up of around a fifth by buy-it-now, pay-later giant Klarna.

Shortly after Coltrane built the position, the WSJ reported that Klarna was considering a fundraising that would value it at $15 billion, a massive drop from 2021’s nearly $46 billion estimate.

The woes of Klarna and other unicorns have weighed on shares of Chrysalis, with shares falling more than 5% in the past five days alone. Short sellers like Manku are poised to make big gains with short bets.

And on the subject of buy now-pay later…

The Treasury says it wants to tighten regulations on the BNPL industry. Lenders like Klarna will have to make sure loans are affordable for customers, while authorities crack down on misleading advertisements. Companies will also need to be approved by the FCA.

Alex Marsh, chief executive of Klarna, said the plans would “raise standards and consumer protection”, but told regulators to put on their skates.

He said: “We urge the government to move faster than expected to implement regulations that provide additional consumer protections against irresponsible and unregulated BNPL providers and traditional banks disguising high interest rate products. in “BNL”.

I have 99 problems but a bitcoin is not one

Jay-Z has joined the long list of crypto-supporting celebrities by starting a so-called Bitcoin Academy — along with Twitter founder Jack Dorsey — in his childhood neighborhood in Brooklyn.

The plan is to promote financial literacy, and it’s free. It will even include a “Crypto Kids Camp”, for children aged 5 to 17.

But with bitcoin in the doldrums, not everyone is happy, reports The Guardian. While hip-hop’s first billionaire is proud of his roots at Marcy Houses, a public housing estate in Brooklyn’s Bedford-Stuyvesant neighborhood, locals have expressed skepticism.

“It’s a bit late to do this when people are trying to hold on to their money and everything is so expensive,” said Myra Raspberry, a 58-year-old retiree. “People don’t want to invest money knowing they might lose it.”

In the middle of the usual maelstrom of crypto bro positivity on Twitter, Raspberry’s statement might be one of the most sensible things FF heard all week.

To contact the author of this story with comments or news, email Alex Daniel

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