Tuesday 30 June 2020 4:02 pm

Wirecard UK fallout lessens

City A.M's Crypto Insider

Readers will be very familiar with the €1.9bn Wirecard scandal that has rocked Germany, firmly placed a spotlight back onto the world of auditors and dangerously caused pause for thought for Fintech firms in the U.K. from a regulatory standpoint.

As of this morning at 00.01 the FCA resumed Wirecard Solutions’ regulated activities which meant customers were able to restart using their cards and accessing their funds.  Whilst this is extremely welcome, the FCA seemed to have initially knee-jerked into a draconian overreaction by suspending them in the first place leaving many thousands of consumers unable to access their funds coinciding with the end of the month when many vital payments had to be made.  The worry is that it sets an alarming precedent which might tarnish London’s Fintech capital of the world status.

Meanwhile the Wirecard AG (German Parent) is far from over.  It is likely that SoftBank and other key shareholders such as Goldman Sachs Group, Morgan Stanley, Societe Generale, BlackRock and Citigroup will be wanting answers from EY, the auditors and be looking forward to how best protect their client interests.  Ironically, since the insolvency and the news that Wirecard employees wages have not been paid Wirecard’s share price has rocketed back upwards by over 150%.  I for one will be avidly reading City A.M.s coverage of this story as in unfolds.

Price Watch

It’s been a pretty stagnant week in the crypto market and, at the time of writing, Bitcoin (BTC) is trading at US$9,127.07  / GB£7,425.31 ; Ethereum (ETH) is at US$224.20 / GB£182.52; Ripple (XRP) is at US$0.1756 / GB£0.1428; Binance (BNB) is at US$15.34 / GB£12.49 and Cardano (ADA) is at US$0.08264 / GB£0.06712.  Overall Market Cap is at US$259.03bn  / GB£210.74bn (data source: www.CryptoCompare.com

City AM’s Crypto Insider

News came in yesterday from Crypto AM Awards 2020 finalist Mode Banking.  The digital banking app launched Euro accounts with SEPA access to provide their UK and European customers with a secure and simple way to add, hold and use EUR to buy BTC. Euro account holders receive their own Euro-denominated IBAN, and are able to make free deposits and withdrawals into their accounts.  This is an important milestone for Mode as it means users can manage their GBP, BTC and now EUR from one single app, empowering more and more people to access the new and exciting world of digital assets.

For long term readers, you will know that Crypto AM follows the development of Cardano, the world’s first third generation blockchain, pretty closely.  IOHK, Cardano Foundation and EMURGO, the companies behind Cardano, have announced the Cardano Virtual Summit – Shelley Edition, a free virtual event which will take place this week on July 2nd and 3rd, in celebration of the launch of the Shelley phase of the blockchain’s development, which will bring full decentralization to the platform. Register here for free.

My friend Charles Hoskinson, CEO of IOHK, enthused “The virtual summit marks a milestone in the development of Cardano, as we start the roll-out of Shelley, bringing decentralisation, with staking and delegation of Ada to the blockchain.  The launch of Shelley brings with it the promise of a blockchain a hundred times more decentralised than Bitcoin and represents another step toward the full delivery of a decentralised, autonomous blockchain, with class-leading scalability and interoperability.” 

The summit is also featuring one of the legendary ‘fathers of the internet’, Vint Cerf who will be taking part in an unmissable fireside discussion focused on what he’d do differently if he had his time to design the internet again. I’m particularly looking forward to the representatives from Wyoming including Tyler Lindholm from Beefchain and Caitlin Long who is a trailblazer in the blockchain space and recently raised US$5m seed finance for her Crypto Bank Avanti.

With the announcement from the government that COVID-19 compliant pubs can reopen this coming Saturday, 4th July it was brilliant to hear that our much loved German Kraft Beer friends will be selling their fresh beer again at the Mercato Metropolitano sites in Elephant & Castle and Mayfair.  COVID-19 compliant though, what does that mean?  The UK government has created a headache for the hospitality industry’s planned re-opening next week by requiring establishments to record people’s contact details in case they need to help with test-and-trace efforts.

Regular contributor Troy Norcross made me aware of a new blockchain startup project which shows innovation in COVID-19 continues apace.  It’s called Tapmydata and I caught up with its CEO Gilbert Hill who outlined their check-in system for bars and restaurants launched yesterday and inspired by the struggles of his local Blackheath pub to cope.  With Tapmydata, establishments register on the web and receive a unique QR code which they can print and display across the venue. First-time visitors download the app (Google & Apple), scan the QR code and enter contact info and details of any symptoms, which is encrypted in the system. 

Venues can load up auto-responses with details of how to stay safe, contact patrons after the event and leave privacy compliance tasks like timed auto-deletion to the system, with a public record (but no personal data) made to the blockchain.  Down the line, Tapmydata’s stellar token and push offers could give venues options to gamify the experience, but for now the focus is on speed and convenience with the service free to use for all parties.

One crypto issuer that is quietly moving forward with its plan is 21Shares.  They currently offer 11 crypto Exchange Traded Products (ETP) from single tracker to the first listed crypto basket ETP as well as an inverse bitcoin and partnership ETP such as Bitwise and Bitcoin Suisse. Speaking with Managing Director Laurent Kssis, he told me: “ As we already list our crypto ETPs in USD, CHF and EUR, it was only natural to add GBP. This opens up our institutional-grade crypto ETPs to all UK investors.”

So this week, 21Shares is dual listing (something very standard in the ETF/ETP world – due to the fragmentation of the European markets) three of their key ETPs in GBP.  21Shares was the first to list a bitcoin ETP on a regulated stock exchange and allowed investors to benefit from a cost effective annual management fees of 1.49% which makes it one of the cheapest crypto ETPs on the market.  According to client feedback, expanding market participation further, specifically amongst UK-based investors, required a listing in local currency. This removes the cost of high and unpleasant FX conversions, as well as access restriction limitations where brokers cannot settle in foreign currency for local clients.

There is already an array of different products available in the UK for institutional investors to access Bitcoin and other digital assets such as CFDs, CME futures, some certificates and other structured products. Exchange traded products are, however, more ideally suited towards investors compared to other available structures due to the most prominent characteristics including full collateralisation, independent market makers and a creation/redemption mechanism which not only allows for larger ticket sizes but also removes price premiums, which are a critical shortcoming in the industry.

Crypto AM contributor & Chairman of Bytetree, Charlie Morris, said  “We are excited by the news of a GBP listing for 21Shares successful crypto ETPs. This will give UK clients more choice by which they can access this emerging asset class with the reassurance of doing so via a regulated European exchange, which is a key factor raised by many institutional investors like us!”

And Finally

Do join me with friends of Crypto AM Security Tokens Realised (STR) today at 16:00 BST – Register here