🚨 Evolve Bank Faces Crisis

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

Christmas is behind us, and 2025 is just around the corner. As we wrap up the year, we’re diving into major fintech stories shaping the new year.

Here’s what we’re diving into:

• Evolve Bank’s crisis sparks industry-wide reassessment of fintech partnerships. 🚨

• Klarna’s $20B IPO heats up the BNPL race. 🚀

• Walmart & fintech under legal scrutiny over questionable account practices. ⚖️

And that’s just the start…

Thanks for joining us during this holiday season—let’s finish 2024 strong and kick off 2025 with unstoppable momentum!

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🌎 3 Major Stories

Dive into this week’s top Fintech developments.

Evolve Bank Faces Crisis as Clients Withdraw Funds 🚨

The Big Story 📰: Evolve Bank, which transformed from a quiet Arkansas farming bank into a leading player in the fintech sector, is currently facing a significant crisis. Following the failure of a business partner, thousands of customers have reported difficulties accessing their funds, prompting a wave of withdrawals. At its height, Evolve Bank managed approximately $10 billion on behalf of various fintech companies, including notable names like Stripe and Affirm. The bank specialized in providing infrastructure and services that allowed fintechs to offer appealing savings accounts with attractive interest rates, leaving the banks to handle customers' funds behind the scenes.

Key Takeaway ⚡️: This situation poses serious implications not only for Evolve Bank but for the broader fintech landscape. As clients withdraw their money and existing customers struggle to access funds, confidence in digital banking solutions could wane. Fintech firms that depend on Evolve’s services must now reassess their partnerships and strategies, as reliance on a single banking partner carries risks that can jeopardize customer trust. This incident serves as a critical reminder of the need for robust operational protocols within banking partnerships, prompting industry stakeholders to prioritize transparency, risk management, and customer assurance moving forward.

Klarna Targets $20B IPO in 2025! 🚀

The Big Story 📰: Klarna, the Swedish fintech known for its buy now, pay later service, is gearing up for a significant IPO set for 2025. Following a successful funding round in 2022 that valued the company at $6.7 billion, experts expect its IPO to attract a valuation between $15 billion and $20 billion. Klarna, which has been diversifying its offerings and increasing efficiency through AI, could soon be a major competitor against existing players like Affirm, especially in the US market. Its partnership with Apple for BNPL integration furthers its influence as Klarna aims to streamline customer transactions while enhancing its competitive edge in both Europe and the States.

Key Takeaway ⚡️: Klarna's impending IPO signals a pivotal moment in the buy now, pay later landscape, offering investors a new avenue while intensifying competition with Affirm and cost-effective alternatives like Afterpay and PayPal. Klarna's substantial user base of over 150 million and daily operations of two million transactions place it in a powerful position to innovate within the fintech space. As Klarna embraces AI to streamline operations and reduce workforce, the fintech sector might witness a potential shift in how companies leverage technology for growth, making it crucial for stakeholders to adapt their strategies. This rapidly evolving arena promises robust opportunities for investment and development in consumer lending.

Walmart & Fintech Face Legal Heat Over Accounts ⚖️

The Big Story 📰: The Consumer Financial Protection Bureau (CFPB) has taken legal action against Walmart and its fintech partner, Branch Messenger Inc., for allegedly opening high-cost bank accounts for delivery drivers without their explicit consent. The CFPB claims that these accounts were required for drivers to receive their payments, amounting to exploitative practices targeting over one million workers. This lawsuit highlights serious consumer protection concerns, as Walmart is accused of making misleading promises and unlawfully profiting from its delivery workforce. The case, filed in the US District Court for Minnesota, raises critical issues about the responsibilities of large corporations in protecting their employees' financial well-being.

Key Takeaway ⚡️: This lawsuit against Walmart serves as a stark reminder of the regulatory scrutiny that big companies face, especially in the fintech space. The CFPB's actions could lead to significant repercussions for Walmart and Branch Messenger if found guilty of exploitation. For fintech firms and potential partners, this incident underscores the importance of ethical practices and transparency in customer dealings. Consumers are becoming increasingly aware of their rights, which could push other corporations to review their own payment practices to avoid similar legal troubles. In a world where consumer trust is paramount, this case could inspire a shift towards more responsible operations within the fintech landscape.

🔍 What Else We’re Watching

Keep an eye on these evolving Fintech Narratives.

• Crypto.com Launches Custody Trust! 🏦: Crypto.com has officially launched its Custody Trust Company, now offering crypto custody services for eligible institutions and high-net-worth clients in Canada and the US. This move marks a significant step for the platform as it aims to solidify its footing in two of the largest crypto markets. CEO Kris Marszalek emphasized that this launch is a vital part of their broader strategy. In the coming weeks, Crypto.com will transfer digital assets for all Canadian and US customers to this new trust, signaling a push for regulatory clarity in the crypto space.

• XTransfer & OCBC Boost SME Finances! 🌏: Cross-border payment specialist XTransfer has partnered with OCBC Bank to supercharge financial services for small and medium-sized enterprises (SMEs) in international trade. This collaboration focuses on enhancing payment processing, foreign exchange, and risk management solutions tailored for SMEs. By tapping into OCBC's extensive network across Asia, the partnership introduces a “Global Multi-Currency Account” to facilitate transactions in multiple currencies. With over 550,000 clients, XTransfer aims to elevate cross-border trade efficiency, paving the way for growth in Southeast Asia and beyond.

• Metaplanet's Bitcoin Bonanza: $61M Spent! 💸: Tokyo-based Metaplanet Inc. isn't holding back on its Bitcoin game; they've just acquired 619.7 BTC for approximately $58.9 million, boosting their stash to 1,761.98 BTC worth about $167.1 million. This latest purchase followed a bond issuance that raised nearly 9.5 billion yen ($60.6 million). Metaplanet's bullish strategy on Bitcoin continues since adopting it as a treasury reserve in May. However, despite these moves, their stock dipped slightly by 0.98% on Monday, reflecting market fluctuations while still boasting an impressive year-to-date increase of around 1,982%.

💸 Major Money Moves

Tracking big market shifts in Fintech this week.

• Infinant Secures $15M for Growth! 🚀: Infinant, a digital banking solutions provider, has successfully raised $15 million in Series A funding, led by FINTOP Capital and JAM FINTOP BankTech. With this fresh capital, the company plans to expand its Interlace platform, which empowers banks to launch and scale digital banking solutions while maintaining regulatory control. As the demand for embedded banking and banking-as-a-service grows, Infinant aims to streamline deposit gathering and payment channels for financial institutions. Recent partnerships with banks like First Bank of the Lake and Legend Bank highlight Infinant’s growing influence in the fintech space.

• Allo Lands $100M Credit Boost for Crypto Lending 🚀: Allo has secured a $100 million bitcoin-backed credit facility to ramp up its crypto lending platform. This financing is pivotal as it bridges traditional finance with blockchain, allowing institutions and individuals to lend in crypto. The firm has staked over 544 BTC, worth more than $50 million, reinforcing its position in the bitcoin ecosystem and minting the $alloBTC token. Notably, Allo is also participating in the Binance Labs and BNB Chain MVB Accelerator, and is gearing up to launch its $RWA cryptocurrency while tokenizing real-world assets. Exciting times ahead!

• CredibleX Secures $55M for SME Lending 🚀: UAE fintech startup CredibleX has successfully raised $55 million in its seed round, led by Further Ventures. This funding, comprising both equity and debt, will enhance its mission to deliver accessible financing to small and medium-sized enterprises (SMEs) across the UAE. Since launching eight months ago, CredibleX has already disbursed AED 100 million (around $27 million) to over 100,000 SMEs through partnerships with 35 distribution allies. With government endorsement and strong investor backing, CredibleX is poised to revolutionize SME lending in the region, driving entrepreneurship and economic growth.

Thanks for reading and have a relaxing Sunday,

— The Money Explored team