On February 26, 2021, the US Securities and Exchange Commission’s (“SEC”) Division of Examinations published a risk alert in connection with the offer, sale, and trading of digital assets that are securities. The risk alert provides observations made by Division of Examinations staff during examinations of broker-dealers, investment advisers, exchanges, and transfer agents. The risk
SEC Examinations Division Issues Risk Alert Regarding Digital Assets
On February 26, 2021, the Division of Examinations (“Division”) of the US Securities and Exchange Commission (“SEC”) published a risk alert regarding its continued focus on digital assets (“Risk Alert”). The term “digital asset,” as used in the Risk Alert, refers to an asset that is issued and/or transferred using distributed ledger or blockchain technology
Fintech Companies Face Investment Company Status Challenges
Fintech companies can face a variety of regulatory challenges under the federal securities laws, including one that often receives minimal attention, namely a company’s status as an “investment company” under the US Investment Company Act of 1940 (the “1940 Act”). Fintech companies that possibly meet the threshold definition of “investment company” under the 1940 Act,
Fintech Sector Financing Update
Funding in the fintech sector increased 17% quarter-over-quarter, after two quarters of declines, to $9.3 billion according to CB Insights’ recent State of Fintech report. Despite the funding increase, the number of deals continued to decline globally, continuing the decline since the fourth quarter of 2019. In the second quarter of 2020, 397 global venture-backed
The Impact of COVID on Fintech Financing
Recent events have negatively impacted fintech funding. CB Insights recently published data comparing fintech financing activity in the first quarter 2020 compared to the same quarter in prior years. While, for example, in each of the prior three years there were between 200 and 300 deals completed each month in the first quarter, in the
The State of Fintech
CB Insights recently published a report, State of Fintech: Investment & Sector Trends to Watch, which provides a number of insights regarding 2019 industry trends.
Global fintech funding in 2019 fell short of the record highs in 2018, with 1,913 deals raising $34.5 million in proceeds in 2019. Quarterly fintech volumes throughout 2019 were
Global Fintech Report
CBInsights recently published its Global Fintech Report for the third quarter of 2019. For 2019, global fintech funding totaled $24.6 billion through the third quarter of 2019, which is still a decline from 2018. Global venture-backed fintech deals rebounded during the quarter in the United States but remain at a three-year low. Globally there are
Global Fintech Financing Trends
CB Insights recently published its Q2 2019 Global Fintech Report. Although there were 838 deals worth $15.1 billion completed during the first half of 2019, this represents a significant decline from 2018 levels, both in number and deal value.
In Q2 2019, the number of VC-backed fintech deals fell to the lowest number since
SEC Fintech Forum
On May 31, the SEC will host the 2019 Fintech Forum, which will focus on issues arising in connection with distributed ledger technology and digital assets. The Forum will be held at the SEC and will also be webcast. The agenda can be accessed here: https://www.sec.gov/news/press-release/2019-59.
Fintech Trends to Watch
CBInsights recently held a webcast that offered a recap of 2018 events affecting the fintech sector. Global fintech investment reached a record at $39 billion in 2018. Venture-backed fintech deals declined in the fourth quarter of 2018 but remain high compared to historic levels. Early stage fintech deal share declined compared to 2017. There are