There was a spate of negative fintech news this week. We had significant layoffs from two of the largest fintechs in the country, Stripe and Chime and Coinbase reported miserable Q3 results. A couple of legal issues in the news were Custodia’s Bank lawsuit against Fed and Coinbase is coming out in support of Ripple’s lawsuit with the SEC. Here are what I consider to be the top ten fintech news stories of the past week.
Stripe Cuts Headcount by 14%, Prepares for ‘Leaner Times’ from Bloomberg – The biggest private fintech of them all is not immune to the downturn. Stripe cut more than 1,000 jobs returning to a headcount of just under 7,000, the same number it had from February this year.
Digital bank Chime is cutting costs across the board – including 12% of staff from TechCrunch – This country’s largest digital bank also announced cuts to 12% of its workforce this week, or about 160 workers. In an internal memo CEO Chris Britt talked of the “need to adjust the size of our organization as we increase our focus and forge our path to profitability”.
Coinbase Posts Third Consecutive Losing Quarter Amid Crypto Rout from The Wall Street Journal – While analysts were expecting ugly quarterly results from Coinbase it was even worse than expected. The company lost $545 million on sales of just $590 million with trading still depressed as the crypto winter continues.
Custodia Bank’s master account lawsuit against Fed likely to advance from American Banker – A federal judge in Wyoming heard oral arguments in the Custodia Bank lawsuit against the Federal Reserve. He declined the Fed’s motion to dismiss the lawsuit and will have a final decision on whether the lawsuit can advance to trial “as quickly as possible”.
Coinbase Files to Support Ripple Against SEC Case from CoinDesk – Coinbase has petitioned a federal court for permission to file an amicus brief in the lawsuit between the SEC and Ripple. The brief questions whether the SEC has given fair notice before bringing enforcement actions and that it has been inconsistent with these actions.
The Credit Suisse Twitter frenzy highlights finance’s trust gap from Fintech Nexus – A few weeks ago the Twitterati went after Credit Suisse, questioning whether the bank was on the verge of insolvency (it wasn’t). But the issue pointed to the vulnerability of financial firms, including fintechs, when it comes to trust and the “meme stock crowd” going after them.
How Far Could CFPB Take Its Crusade on Bank ‘Junk Fees’? from The Financial Brand – The CFPB’s latest attack on banking fees targeted surprise overdraft fees, when a debit card transaction is authorized but has insufficient funds when it is settled, and depositor fees, when a depositor is charged a fee for a check that bounces.
Brex co-founder Henrique Dubugras details decisions behind pivots, layoffs, going remote from TechCrunch – In his first public comments since Brex’s pivot away from small businesses CEO Henrique Dubugras explains their thinking in this candid interview. You understand where they were coming from in their pivot after reading this but it was still poorly executed, particularly from a communications perspective.
Plaid sheds light on fintech’s trajectory in the face of economic challenges from Fintech Nexus – Plaid’s third annual Fintech Effect report showed that fintech adoption dropped overall between 2021 and 2022, except among young people, as many returned to in-person banking. This followed a huge increase in the previous survey.
The Big Potential of Banking Apps for Kids: Attract the Parents from The Financial Brand – I am a big fan of banking apps for kids (we use Step) and see it as one of the biggest opportunities in fintech. RBC is offering its Mydoh app to other banks and in the U.S. GoHenry is also looking to roll out its tech to banks next year.
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