This is the web version of The Ledger, Fortune’s weekly newsletter covering financial technology and cryptocurrency. Sign up here to receive future editions.
Last week my colleagues and I were in San Francisco to host a lead-up dinner for our Brainstorm Finance conference, taking place June 17th and 18th in Montauk, New York. (Email me if you would like an invitation.)
Our team assembled some of the finest minds at the intersection of finance and technology to discuss what’s occupying them. Bankers at Morgan Stanley and Silicon Valley Bank rubbed elbows with techies from Facebook and Google. Leaders of the still-persevering Libra team clinked wine glasses with erstwhile collaborators, Visa and PayPal, while execs at these companies, in turn, toasted new multibillion-dollar acquisitions, like Plaid and Honey.
Although it was an intimate affair, the dinner assembled a model cross-section of the finance-and-tech industry. Old stalwarts mingled with the new establishment—SoFi, Square, Stripe. They swapped gossip with the even newer establishment—Chime, Robinhood, Brex. And these mingled with international giants, like Ant Financial, and cryptocurrency tycoons, like Coinbase and Kraken.
They say you should never discuss politics or religion in polite company, but no topic was off-limits at this meal. Bitcoin devotees, for whom the technological marvel that is blockchain is effectively religion, sparred with skeptics. Soon-to-be-voters worried about the political battle brewing on America’s turf between socialism and capitalism. Everyone seemed to wonder whether the market’s roaring bull run will soon come to a spectacular end—another casualty of coronavirus.
On the subject of cryptocurrency alone, there was no shortage of enlightening conversations. One founder told me about his desire to put himself out of business. He plans to issue “tokens” that will decentralize the company’s operations, allowing it to operate without a traditional management team—at least in theory. Another attendee, one who participated in the industry’s recent flurry of M&A activity, mentioned that the acquisition of a struggling business was an opportunistic purchase. Someone else described getting targeted by a SIM-porting attack, where a hacker attempted to hijack a phone number to defraud him of millions.
That’s just a small sliver of what will be on the menu in Montauk. We can’t wait to continue the conversation there this summer.
Robert Hackett
DECENTRALIZED NEWS
This edition of The Ledger was curated by David Z. Morris. Contact him at david.morris@fortune.com.
Credits
The Federal Reserve cuts interest rates by a whopping half-percentage point to tamp down coronavirus anxiety ... India's Supreme Court strikes down a ban on banks dealing with cryptocurrency ... Square sold $178 million worth of bitcoin through its Cash App in Q4 2019 ... U.S. Customs and Border Patrol tests blockchain for protecting intellectual property ... Samsung is working on a blockchain-based settlement and payments systems for banks ... Algorand will be the underlying blockchain for the Marshall Islands' digital currency.
Debits
Facebook may rethink Libra to win over skeptical regulators ... Steven Seagal settles with the SEC for $157,000 over promoting a bitcoin knockoff ... Mastercard is working on technology that could identify you by the way you walk ... Best Buy's "progressive leasing" service can double the price of purchases ... The U.S. government sues to seize 113 cryptocurrency exchange accounts used in hacks by North Korea ... Paris Blockchain Week cancelled over coronavirus fears ... Ripple pays Moneygram millions in "market development fees" for using its tech ... Justin Sun of Tron engineers a complex takeover of the supposedly decentralized Steem blockchain ... A former Microsoft employee stole $10 million, using bitcoin to (unsuccessfully) hide his trail.
FOMO NO MO'
“The commodities markets [analogy] is very fitting,” said Deeksha Gupta, an assistant professor of finance at the Carnegie Mellon University in Pittsburgh who has researched crypto. “One of the biggest similarities is that they are also driven by people wanting to be able to get liquidity.”
The European Union plans to outline a framework this year for regulating cryptocurrency. Ahead of that debate, Reuters considers the nearly decade-old question of whether crypto is a currency (probably not), security (perhaps), or commodity (possibly). The rise of lending markets offering fiat loans against crypto reserves is cited as one reason crypto could be regulated as a commodity, since it's similar to the way traders get liquidity from wheat, oil, or silver holdings.
BUBBLE-O-METER
$850
That's the maximum amount the Commodities Future Trading Commission permits you to bet on any single outcome in election betting markets. Max Raskin, writing in the Wall Street Journal, argues not only that the limit is "paternalistic" (just like most financial regulations), but that the cap prevents useful financial applications. For instance, he argues, companies who would be harmed by a particular election outcome could use betting markets to hedge. Raskin cites blockchain innovation as another reason to rethink the rules, as well as recounting the rich history of election betting in the U.S. to justify it. (It's worth mentioning, of course, that history also included a mass lust for bucket shops and plenty of other bad ideas.)
THE LEDGER'S LATEST
Stock app Robinhood goes down, missing an entire trading day - Jeff John Roberts
. . . And a second one - Chris Morris
Square and Twitter 'strongly encourage' employees to work from home amid coronavirus fears - Danielle Abril
With a new tech-centric CEO, Mastercard chases the fintech prize - Rey Mashayeki
Worried about the stock market? Resist the urge to panic - Ben Carlson
Credit Karma was acquired instead of pursuing an IPO. Other fintechs might follow suit - Lucinda Shen
Ripple claims a big win in the quest to use cryptocurrency in banking - Jeff John Roberts
Coronavirus threatens the health of corporate earnings - Anne Sraders
MEMES AND MUMBLES
Domo, a DJ who has worked with Wiz Khalifa, MTV, and Apple Music, blasted PayPal for a 10-month freeze on her account. The resulting thread saw dozens of others share similar headaches with the original fintech.
