The Fintech Files: Moelis Bites on Blockchain, UK Crypto Cops Get Some Teeth

The move, which comes after a brutal market crash in crypto, shows how much stocks like Moelis are putting into the sector. It may also come at an appropriate time for the conclusion of an agreement.

Companies that still have capital are preparing for a shopping spree, with figures such as FTX CEO Sam Bankman-Fried emerging as potential white knights for the sector. Over the weekend, he made an offer to restructure the assets of bankrupt crypto broker Voyager Digital.

Jalak Jobanputra, the founder and managing partner of crypto-focused venture capital fund Future Perfect Ventures, told The The Wall Street Journal earlier in July, the crash had provided “a very ripe scenario for some M&A”.

Moelis has appointed head of media investment banking John Momtazee to lead the division, which will also include senior adviser and blockchain specialist Lou Kerner, a former research analyst at Goldman Sachs. who founded CryptoOracle Collective, a Web3 consulting company.

“With more than 50 unicorns and several decacorns [a private company valued at more than $10bn] in the sector already and nearly $20 billion raised for blockchain companies last year, blockchain technology is poised to be as transformative to the global business landscape as the internet was in the late 1990s, Momtazee said in a statement.

The crypto police are coming

Britain’s top cyber police, the National Crime Agency, seized £26.9m of crypto assets in the year to the end of March 2022, up from zero in the previous 12 months, according to the agency’s annual report.

Crypto made up a significant portion of the property seized by the NCA for the 2021/22 year, which totaled £59.79 million.

Michael Munk, a managing associate in Linklaters’ dispute resolution team, said the figures showed police were “developing a deeper understanding” of crypto.

Unsurprisingly, that still pales in comparison to the US Department of Justice, which in one investigation alone this year seized $3.6 billion of cryptocurrency stolen in a hack of the Bitfinex trading platform in 2016.

“After years of playing catch-up, law enforcement agencies are showing an increased ability to track and seize stolen or laundered crypto assets,” Munk added.

Barclays is putting its pennies in Copper

Barclays is taking a stake in Copper, the digital asset firm which counts former chancellor Philip Hammond among its senior advisers, according to Sky News.

Founded by Dmitry Tokarev in 2018, Copper provides crypto services to institutional investors, including custody, prime broking and settlement. A new round of financing is now reportedly under way.

City sources told the news agency that Barclays was expected to invest a relatively modest sum in the millions of dollars as part of the round.

The last time Copper went out to investors was in June 2021, when it raised $75 million in Series B funding. Then billionaire investor Alan Howard contributed $25 million to the fundraiser.

Copper did not respond to a request for comment.

Coin base hit by double US probe

Crypto exchange Coinbase is being investigated by the Securities and Exchange Commission over whether it allowed people to trade digital assets that should have been registered as securities, Bloomberg reports.

“We are confident that our rigorous due diligence process — a process the SEC has already undergone — keeps securities off our platform, and we look forward to engaging with the SEC on the matter,” Coinbase’s chief legal officer Paul Grewal said on Twitter.

The investigation precedes the SEC’s separate investigation into an alleged insider trading scheme, which WSJ reports led the regulator to sue a former Coinbase executive and two other people.

Celsius and Voyager Digital: Customer Testimonials

After the double bankruptcies of the lender Celsius and stock exchange Voyager Digital, the courts have begun to publish letters sent to the judges from the companies’ respective clients.

It is the first legal testimony from retail investors who in some cases have lost their savings. Some of it is hard to read.

Analicia V, a single mother who describes herself as a small investor and Voyager account holder, wrote that she had invested “a significant amount” of her savings in hopes of saving for a home.

“But the opposite has happened,” she wrote. “I feel like I’m being strategically robbed in a civil way by Voyager Digital.

“My cognition has rapidly declined due to depression because I can barely afford living expenses and have very little money left in case of a financial emergency… I may never be able to recover financially from the losses this organization has caused.”

Ben Hughes, a Celsius customer, wrote that he had been led to believe that Celsius was “‘the safest, most transparent home for crypto’ and for that reason kept almost all of my assets with them – emphasis on the past tense”.

Now Hughes is in “a desperate situation”, he wrote. “I can’t rent out and I’m way behind on my tax savings as I had entrusted them to look after my money. I am in great need of money and feel a little helpless, especially as a small holder; powerless.”

Elsewhere in fintech

Challenger bank Starling said it would have to sell its software to other banks to meet its global ambitions rather than expand via its core digital consumer banking offering, and has set its sights on Europe, the US and potentially Australia.

Titanium Blockchain’s founder and CEO, Michael Alan Stollery, has pleaded guilty to his role in a cryptocurrency fraud scheme that involved raising about $21 million in an initial coin offering, the U.S. Department of Justice said on April 25.WSJ).

And on July 21, Financial news caught up with Charles Allen, chairman and CEO of BTCS, the Nasdaq-listed blockchain firm known for being the first to offer bitcoin dividends.

He described the crypto winter as “a blip” and talked about how the industry should get ahead of regulators.

Listen to the entire podcast here.

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