⚖️ Coinbase hit with $1B lawsuit

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Hey Fintech Navigators—Welcome back to Money Explored, the essential Sunday newsletter to stay ahead in fintech!

This week, we’re exploring bold lawsuits, billion-dollar valuations, and fintech power moves that are shaping the future.

Here’s what we’re diving into:

• Coinbase slapped with a $1B lawsuit over its wBTC delisting, stirring crypto controversies. ⚖️

• Walmart’s fintech arm, One, hits a staggering $2.5B valuation, challenging traditional banks. 🚀

• Demica’s $300M acquisition by FIS reshapes the global supply chain finance game. 🌍

And that’s just the start…

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🌎 3 Major Stories

Dive into this week’s top Fintech developments.

Coinbase Sued for $1B Over WBTC Delisting ⚖️

The Big Story 📰: Coinbase has found itself in hot water, facing a staggering $1 billion lawsuit from Hong Kong-based BiT Global Digital Limited over the delisting of Wrapped Bitcoin (wBTC). BiT Global alleges that Coinbase's move to delist the token was not simply a regulatory decision but a strategic play to stifle competition in favor of its newly launched wrapped Bitcoin product, cbBTC. Filed in the Northern District of California, the lawsuit claims this action caused significant financial harm and undermined consumer trust in wBTC. BiT Global insists that Coinbase provided misleading reasons for the delisting, raising serious concerns about anti-competitive practices in a market already fraught with volatility.

Key Takeaway ⚡️: This lawsuit spotlights the intense competitive dynamics within the cryptocurrency space and raises critical questions about market fairness. If large exchanges like Coinbase can manipulate listings to promote their products, this could have chilling effects on innovation and consumer confidence in crypto markets. The outcome of this case may set a precedent for how exchanges operate moving forward and could lead to stricter regulations aimed at ensuring fair competition. For industry players and investors, keeping a close eye on the developments in this case is essential, as it could shape the regulatory landscape and impact market strategies in the ever-evolving fintech environment.

Walmart's Fintech Soars to $2.5B Valuation 🚀

The Big Story 📰: Walmart is doubling down on its financial services strategy, recently achieving a valuation of $2.5 billion for its startup, One, after raising over $300 million in a funding round led by Walmart itself and investment firm Ribbit Capital. This investment signifies a more focused effort from the retail giant to penetrate the financial sector, capitalizing on its extensive customer base that includes over 1.6 million employees in the U.S. With products like installment loans and debit cards already in play, One has quickly garnered 3 million monthly active users. As Walmart continues to reshape its financial offerings, traditional banks are on high alert about this retail giant's ambitions to challenge their market dominance.

Key Takeaway ⚡️: Walmart’s aggressive expansion into fintech through One is a game-changer for the industry, indicating that retail giants can become formidable competitors in financial services. With a solid revenue trajectory and a strategy to leverage its massive customer base, Walmart is poised to disrupt traditional banking. This trend emphasizes the need for banks to innovate and adapt to stay relevant. Financial professionals and investors should keep a close eye on Walmart’s next moves, as they may pave the way for new models in customer engagement and service delivery, reshaping the landscape of personal finance.

Demica Joins FIS for $300M Transatlantic Deal 🌍

The Big Story 📰: Demica, a prominent UK supply chain finance provider, is being acquired by American fintech giant FIS in a deal valued at approximately $300 million. As a leading player with around $40 billion in assets under administration, Demica has established partnerships with major banks like HSBC and Lloyds Banking Group. This acquisition comes a decade after Demica was sold to a private investor consortium, marking a significant exit for those stakeholders. With a 40% annual growth in assets since 2016, Demica has become integral in supporting trade banks and corporate clients with innovative financing solutions. The takeover also raises concerns about the ongoing trend of foreign ownership in the UK's fintech sector.

Key Takeaway ⚡️: The acquisition of Demica by FIS signifies a strategic move in the fintech landscape, showcasing the increasing interest from international firms in UK-based financial technology. For stakeholders in the sector, this could indicate a shift in competitive dynamics, as larger firms like FIS expand their portfolios and technologies. Demica's steady growth underscores the demand for supply chain finance solutions, a trend that is likely to continue as businesses seek more flexible liquidity options. Fintech enthusiasts and investors should watch for how this deal impacts the supply chain finance industry and whether similar acquisitions may follow, reshaping the market further.

🔍 What Else We’re Watching

Keep an eye on these evolving Fintech Narratives.

• Klarna Hit with $50M Fine for AML Flaws 🚨: Sweden's Finansinspektionen (FI) has slapped Klarna with a hefty $50 million fine due to significant shortcomings in its anti-money laundering (AML) protections. Following an investigation from April 2021 to March 2022, the regulator found that Klarna neglected to assess how its services could facilitate money laundering or terrorist financing. Daniel Barr from FI stressed the crucial need for banks to adhere to AML regulations to prevent criminal misuse, underscoring a growing trend of hefty penalties in the banking sector for such violations.

• MicroStrategy's Bitcoin Bonanza Continues 📈: MicroStrategy Inc. has made waves again, purchasing an additional $2.1 billion in Bitcoin, marking the fifth consecutive Monday of acquisitions. Now holding over $41 billion worth of the digital asset, the firm’s recent buying spree coincides with its strategy shift aimed at raising $42 billion through equity and debt. While this aggressive approach has fueled a staggering price surge in its shares, analysts warn that the firm’s heavy reliance on Bitcoin could lead to significant risks if the crypto market sees a downturn. Market fluctuations could impact both MicroStrategy and the broader cryptocurrency ecosystem.

• Circle and Binance Team Up for USDC Surge 🌍💰: Circle Internet Group Inc. and Binance have joined forces in a strategic partnership to promote the global adoption of USDC, a prominent dollar-backed stablecoin. Unveiled at Abu Dhabi Finance Week, this collaboration aims to make USDC more accessible to Binance’s immense global user base, which includes over 240 million users. By integrating USDC across its suite of products, Binance enhances its trading, savings, and payment applications. Additionally, this partnership signifies Binance adopting USDC as a key stablecoin for its corporate treasury, fostering further on-chain adoption of digital currencies and practical use cases across the financial landscape.

💸 Major Money Moves

Tracking big market shifts in Fintech this week.

• Affirm’s $4B Loan Shot in the Arm 💪: Affirm Holdings has struck a monumental partnership with Sixth Street, setting the stage for a whopping $4 billion investment in Affirm loans. Utilizing a forward flow agreement, this deal marks Affirm’s largest capital commitment to date, paving the way for over $20 billion in loans over the next three years. Despite a slight dip in stock price after the announcement, Affirm reported impressive Q1 revenue of $698.47 million, exceeding analyst expectations. As the Buy Now, Pay Later market continues to thrive, Affirm's robust partnerships with giants like Amazon and Apple solidify its position as a fintech leader, aiming for profitability by fiscal 2025.

• MobiKwik's IPO Hits $4.7B in Bids! 🤯: India's fintech darling, MobiKwik, has experienced a monumental IPO subscription frenzy, attracting bids worth $4.7 billion for its $67 million offering. The IPO was fully subscribed within just an hour, showcasing retail enthusiasm with a whopping 135 times over-subscription. Institutional investors weren't left out either, hitting 120 times their reserved shares. Analysts anticipate MobiKwik shares could debut at around a 50% premium in the grey market, signaling strong investor confidence in the booming online payments sector. MobiKwik aims for a valuation of up to $256 million when it begins trading on Dec. 18.

• Klickl Secures $25M Series A to Drive Web3 🚀: Klickl, the emerging Web3 Open Finance platform, has successfully raised $25 million in a Series A funding round, elevating its valuation to $125 million. The funds will fuel Klickl's expansion into MENA markets, aiming to establish itself as a fully licensed Web3 banking service, featuring crypto custody and brokerage. Key initiatives include the launch of Klickl Labs and Klickl Foundation, set to drive innovation in digital payments and remittances. Co-led by Web3Port Foundation and Aptos Labs, this funding marks a significant milestone for Klickl in the Web3 arena, strengthening compliance through a partnership with Sumsub.

Thanks for reading and have a relaxing Sunday,

— The Money Explored team