NEWSLETTER 1.0
FEBRUARY 1, 2024
Future FinTech Group Inc.
By: CJ Dwumfuoh
Future FinTech Group Inc. was charged with fraud by the SEC for stock manipulation. The company’s stock has plummeted by 48 percent over the past 12 months after the SEC charged CEO Shanchun Huang with allegedly inflating the company's share price just before accepting his new position. The company brands itself as a comprehensive FinTech service provider. It conducts asset management, brokerage, and investment banking services in Hong Kong, operates a cross-border payment business in the UK, provides cryptocurrency trading data information services in the UAE, and engages in supply chain trading and finance businesses in China. Additionally, the company provides digital asset computing power custody services in Paraguay and has initiated digital asset mining farm operations in the US. According to Market Watch, as of January 11, 2024, the stock has dipped by 17 percent to $1.07. The SEC alleged in a complaint that day that Huang used manipulative trading techniques in early 2020 to push the fintech firm's share price up, to prevent it from being delisted from the Nasdaq exchange as well as trading below the $1 minimum bid price. The Committee also alleges that Huang failed to make required filings about his ownership stake in the company until a year after he became CEO, by which time he no longer owned any company stock. According to The Wall Street Journal, Huang claimed that he relied on the advice of retained professionals in connection with his disclosure obligations. The CEO claimed that he has cooperated with the SEC and testified in the investigation that led to the lawsuit.“I will not permit the SEC’s case to interrupt my and the board’s vision for the growth and success of the company,” Huang said. Additionally, a shareholder filed a class action lawsuit on behalf of all persons and entities that purchased or acquired Future FinTech. Similarly situated shareholders may be eligible to participate in the class action against Future FinTech, according to Robbins LLP.
USDC Is The Future: Everything You Need to Know About Circle’s IPO
By: Kelvin Sekigahama
Circle, a globally recognized financial technology firm known for collateralizing its digital currency on a 1:1 ratio of USD (US dollars) to USDC (USD Coin), has recently filed for its Initial Public Offering (Bankless). Dating back to 2021, Circle had already attempted to go Public once through a Special Purpose Acquisition Company (Forex.com) however, this attempt did not succeed. This news comes as a surprise with the recent downturn in the cryptocurrency market, as downsizing, layoffs, and other factors have affected many companies. But what does this mean for the overall growth of the company and fintech as a whole?
Founded in 2013 and launched in 2018, Circle has been one of the most successful companies within cryptocurrency as more people have switched to digital wallets. USD Coin allows its users to store their money safely and use it as a way to exchange currency. With recent fluctuations within the market, Circle has stayed pegged to the US Dollar (1:1 ratio), with the exception of their debugging from USD due to the Silicon Valley Bank. With an evaluation of $9 billion dollars dating back to November of 2023, Circle has been growing despite the USDC market cap dropping by 56% since this report (CNN). Now, according to Bloomberg, Circle looks to go public sometime early this year as it awaits review from the SEC.
With Circle’s IPO on the horizon, they have gained recognition from many big-name companies like Goldman Sach, Blackrock, and more, which combined for a total of $400 million (CNN). In addition to this, they hold most of the $230 billion in decentralized financial markets, but they do not have to reveal the exact amount in reserves, making their stability questionable. Deloitte, a third-party user, however, has audited USDC reserves annually, ensuring their reserves are recorded accurately. Now, Circle's initiative is to become the coinbase of stablecoins as they try to change the narrative of coinbase through their openness and willingness for stricter regulations. Their IPO could set the stage for many investors to make a worthwhile investment as cryptocurrency and the digital industry has been growing rapidly as a whole.
GetSafe’s Footprint Grows with the Acquisition of Another Insurtech Company
By: Connor Menke
A European company called Getsafe is an insurtech company which is an innovative use of technology for insurance companies. Insurtech is a subset of fintech, because of the transformative applications of technology within the insurance companies that use the resource.
Getsafe has recently acquired a company called deineStudienfinanzierung, a German company that uses a digital platform that aids students with their loans. This has assisted with Getsafe’s direct-to-consumer strategy through technology. Over 200,000 students have been able to assist with their student loans, and has amounted to over a billion dollars in financing for their clients higher education goals.
The easy access to this platform is what has made deineStudienfinanzierung an attractive outlet for students, because of the ease to get loans, as well as not having a need for brokers due to the technology basis of this platform. This has greatly improved the road to getting loans, particularly first loans for many of the clients, who traditionally have worked on the side to finish their degrees rather than finance their education.
Getsafe has been heavily investing in the insurtech realm, and with this most recent acquisition of the number one digital platform for student loans. It continues to prove itself as an innovative company that plans to continue to reach new heights because of their focus of using technology as an aid to reach potential clients. Getsafe plans on continuing their efforts in expanding their services through Europe, creating an even larger platform throughout the continent, continuing efforts to benefit people through their efficient use of technology.