JPMorgan marks its trade
JPMorgan has an interesting relationship with crypto. One minute it is launching its in-house JPM Coin, the next its chief executive is describing bitcoin as a hyped-up fraud.
Things are about to get even more curious.
The bank has filed for two trademarks in the UK relating to its digital assets business, Financial News can reveal, in a move that signals the US investment bank might want to expand its crypto-trading capabilities across Europe.
The US bank is among a slew of Wall Street firms that have made a move into crypto, having created its Onyx digital assets unit in October 2020 for blockchain-linked projects.
It is also working on tokenising real world assets such as US government bonds via its Onyx blockchain platform. Now a push into the UK market could be on the cards.
According to filings lodged with the Intellectual Property Office in June, JPMorgan wants to register Onyx Digital Assets and Onyx Digital Payments for use in the UK market.
The UK trademark applications from JPMorgan come as other traditional financial services firms ramp up their focus on digital assets.
Deutsche Bank is seeking regulatory approval to launch a crypto custody function, while fund management giants BlackRock and Fidelity are aiming to start bitcoin exchange traded funds, which track financial indices. Fidelity, Citadel Securities and Schwab are also backing a crypto exchange.
Meanwhile, Goldman Sachs rebooted its crypto trading desk in 2021, while a spin out from Japanese bank Nomura, called Laser Digital, will include trading and venture capital funding as part of its offering.
Last year Umar Farooq, chief executive of Onyx, told Financial News that crypto was in the “Napster age” and that crypto was “here to stay”.
At the end of 2021, JPMorgan signed a deal to develop a blockchain-based payments application for German industrial giant Siemens, in what it called a first-of-its-kind development.
Regulation, regulation everywhere…
Another week in fintech has come and gone, and it was another seven days defined by a deluge of regulation.
It was a tale of two companies with contrasting fortunes. On 13 July, the Securities and Exchange Commission charged Celsius and then-chief executive Alex Mashinsky with running a multi-year scheme to prop up the value of the company’s internal token.
The SEC was just one of a quartet of authorities cracking down on the crypto firm; the Justice Department separately indicted Mashinsky and another executive on related charges, while the Commodity Futures Trading Commission and Federal Trade Commission also filed lawsuits.
On 17 July, the net on the industry tightened some more, as the Financial Stability Board called for regulators to foster cross-border cooperation and information sharing when overseeing digital assets, including by setting minimum standards for regulating the sector. The long and short of it is that the FSB wants a comprehensive set of rules for digital assets.
So much for the bad news. Because Ripple Labs got something of a reprieve from its own regulatory troubles this week.
US District Judge Analisa Torres ruled that Ripple Labs’ crypto token, XRP, is not a security when sold on digital asset exchanges to the general public. The catch? Ripple’s sales to sophisticated institutional investors did qualify as an unregistered sale of investment contracts, in violation of federal law. That’s why securities law experts are warning that the decision may not prove to be a lasting victory for digital assets investors.
Meanwhile, in an exclusive interview with FN, Coinbase’s legal chief reflected on the exchange’s own compliance headaches. In June, the SEC charged Coinbase with operating an unregistered securities exchange. Paul Grewal says he is up for the challenge.
In other news
One of the UK’s most successful fintech entrepreneurs has passed away. Nick Hungerford, the founder of Nutmeg, died on 6 July, aged 43, after a being diagnosed with terminal bone cancer last year.
Hungerford built one of the leading digital wealth management firms in the UK, raising funds from the likes of Goldman Sachs, Hong Kong’s Convoy, and Taiwan’s Taipei Fubon Bank before selling the business to JPMorgan in 2021.
Tributes poured in from across the sector. Our thoughts and prayers are with his friends and family.
And double finally…
Earlier this month, the UK government put investing in startups and fintechs at the heart of plans to revitalise growth in the City.
But will the moves pay off for investors? Tune into our live webinar at 5pm on 20 July to find out.
Elon Musk says Twitter ad revenue has halved since his takeover (The Telegraph)
Efforts to rein in AI tap lesson from social media: Don’t wait until it’s too late (The Wall Street Journal)