Fintech & Crypto News in the Enterprise

There was a LOT of news this week in the cryptocurrency and marketplace lending world so this week I'm going to hit on 5 of the more important stories of the week. Many involve enterprise size businesses. Here they are...

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Binance Hack

Binance is the largest crypto exchange out there. They got hacked for $40 million or more than 7000 BTC, as reported by Coindesk. Binance said that customer accounts were not affected and these were funds taken from their own hot wallet. All other customer wallets are secure, according to CZ, the active Bitcoin voice and CEO of Binance.

NewsBTC reports that this is a small amount for Binance, who can make up this income in just 47 days based on current Revenue patterns.

A couple of important points here:

  1. Do not leave your coins on an exchange except for the amount you intend to trade in the very short term
  2. Always use a wallet whose keys you control
  3. Monitor your own safety practices
  4. Both Bitcoin and the Binance Coin shrugged off this news with no negative effects. A sign of Bitcoin's anti-fragile nature. Bullish.

Fidelity to trade in BTC

Bloomberg reported this week that Fidelity, who had already started a custody service for Bitcoin, would start trading BTC 'within a few weeks' through their Fidelity Digital Assets unit. They, along with RobinHood and ETrade offer crypto trading to their customers.

Take note that Fidelity's new offering of this custody is only for institutional customers, yet I think this is a HUGE plus for the industry. Here are a couple of other interesting tidbits from this article:

  • In an institutional investor survey, 72% of these investors prefer to buy an investment product that has a digital asset (think fund or ETF), while 57% want to buy the digital asset directly.
  • 47% of institutional investors in this survey said digital assets were worth investing in

I think this is very bullish for the industry. Keeping holding your coin.

DTCC: An Enterprise Use for Crypto

Forbes reported on an interesting use case for blockchain, the DTCC. The Depository Trust Clearing Corp (DTCC) clears all stock and bond transactions in the US. It's an incredibly complex setup they have.

Because they hold the master ledger on $48 trillion worth of assets, they are looking to blockchain tech to help them. Tracking of these kinds of financial records, while maintaining some semblance of privacy is a great use case for blockchain.

Read the article as it's full of interesting tidbits on what financial enterprises are looking for from the technology.

Lending Club Earnings

The poster boy for marketplace lending, Lending Club, issued its earnings this week. LC lost 3c per share, less than the 4c per share that was expected on stronger than expected loan origination numbers. Revenues were up 15% to $174 million.

Here's Seeking Alpha's take on the quarter and here is PYMNTS.com with their analysis. CEO Scott Sanborn is trying to guide the company to profitability with talk on increasing both Revenues and margins but they are still not profitable....yet.

I'm always looking out for investment opportunities for you guys and I don't like LC stock except maybe as an acquisition target for a bank.......but I do still like it for loans.

Amazon Lending Service in China

CNBC is reporting this week that Amazon, who shut down their marketplace in China, is still doing tons of business there opening up a lending service with a local factoring company. Chinese products are a big % of what sells on Amazon. Many of you are familiar with FBA or Fulfillment by Amazon. This is their platform where they let you source your own product (usually from China) and put it to their marketplace to sell. Many businesses large and small use Amazon's platform to sell their goods and Amazon knows China is a big contributor to their Revenues.

So many Chinese companies have products selling on Amazon now that AMZN can focus on just businesses that use their platform......at least for now. The loans are essentially working capital or inventory loans for the manufacturers of these many items that sell on the marketplace.

This is a really smart idea from one of the few companies in the world that is working on fintech, lending and blockchain solutions all at the same time.

About the author

Stu Stu Lustman, the author of this post, is a Credit Analyst by trade trying to bring Commercial Credit Analysis techniques to the world of Peer to Peer Lending. Check me out on Twitter, LinkedIn and Google+

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