Fintech
BB1 Acquisition Corp. and Cerrado Gold Inc. Announce Closing of the Second and Final Tranche of Special Warrant Offering for Gross Proceeds of US$1,724,000
Total financing proceeds from first and second tranche were US$7,076,600
Toronto, Ontario–(Newsfile Corp. – September 14, 2020) – BB1 Acquisition Corp. (TSXV: BBA.P) (the “Company” or “BB1“) and Cerrado Gold Inc. (“Cerrado“) are pleased to announce that Cerrado has completed the second and final tranche of a brokered private placement of special warrants (“Special Warrants“) for aggregate gross proceeds of approximately US$1,724,000. Total funds raised under the first and second tranche of the Cerrado placement (the “Offering“) were US$7,076,600. Haywood Securities Inc. (the “Agent“) acted as sole agent in the Offering.
The Offering has been completed in connection with the proposed business combination (the “Transaction“) between Cerrado and BB1 previously announced in a press release of BB1 dated August 4, 2020, which transaction is intended to constitute BB1’s “Qualifying Transaction” pursuant to Policy 2.4 of the TSX Venture Exchange (the “TSXV“).
Under the second tranche of the Offering, Cerrado issued an aggregate of 2,155,000 Special Warrants at a price of US$0.80 per Special Warrant (the “Offering Price“) for gross proceeds of approximately US$1,724,000.
The net proceeds from the Offering will be used to complete an updated NI 43-101 mineral resource report for Cerrado’s Minera Don Nicolas mine (“MDN‘), to complete an Initial Preliminary Economic Assessment prepared in accordance with NI 43-101 based upon the current defined resources at Cerrado’s Monte de Carmo Gold Project (“MDC“), to undertake a new exploration drill program and associated metallurgical test work aimed at expanding the current resource, and for general working capital purposes.
Each Special Warrant will be exercisable by the holder thereof at any time after the date of closing of the Offering, without payment of any additional consideration therefor, for one common share in the capital of Cerrado (a “Cerrado Share“), subject to customary adjustments. Each unexercised Special Warrant shall be deemed to be exercised for one Cerrado Share in connection with the completion of the Transaction. Upon closing of the Transaction, each Cerrado Share shall be exchanged for a common share in the capital of the Company, as described in detail in the Company’s press release dated August 4, 2020.
In the event that the Transaction has not occurred prior to 4:00 p.m. (Toronto time) on the date which is 180 days following the date of closing of the Offering (the “Qualification Deadline“), each unexercised Special Warrant will be deemed exercised and will automatically be exchanged for 1.1 Cerrado Shares without further payment or action by the holder thereof.
On closing of the second tranche, Cerrado paid the Agent a cash commission together with a corporate finance fee totalling approximately US$108,000. In addition, Cerrado issued to the Agent an aggregate of 134,600 compensation options and corporate finance fee options (collectively, the “Agent’s Options“), each entitling the Agent to purchase one Cerrado Share for a period of 24 months from the closing of the second tranche of the Offering at the Offering Price. Should the Transaction not close prior to the Qualification Deadline, the number of Cerrado Shares issuable pursuant to the Agent’s Options shall by multiplied by 1.1. In addition the Company paid a cash finder’s fee of US$13,000 and issued 16,250 finder’s warrants to an eligible finder. The finder’s warrants were issued on the same commercial terms as the Agent’s Options. Upon closing of the Transaction, the Agent’s Options and finder’s warrants will be exchanged for warrants of BB1 in connection with the Transaction.
Unless permitted under securities legislation, all securities issued pursuant to the Offering are subject to a hold period ending on the date that is four months and a day after the later of (i) September 10, 2020, and (ii) the date that Cerrado became a reporting issuer in any province or territory.
About Cerrado
Cerrado is a gold mining and exploration company with assets in Argentina and Brazil. Cerrado was continued under the laws of the Province of Ontario on October 3, 2017. In Argentina, the Company owns Minera Don Nicolas, a well-established in-production gold mine. The mine commenced operations in 2017 and is targeting to produce in excess of 50,000 oz per year via a 1,000 tpd CIL plant and related facilities. In Brazil the company is exploring at its Monte do Carmo gold project in Tocantins state. The project currently has a mineral resource prepared in accordance with NI 43-101 containing 813,000 oz with significant upside expected via further exploration. The Board and management of Cerrado have a long history of success having developed numerous projects from early stage exploration through development and production.
Cerrado acquired MDN in March of 2020 for a purchase price of US$45MM, payable in staged payments. Cerrado paid an upfront payment of US$15MM on closing (March 16, 2020) with the remaining US$30MM payable over a 5-year period as follows: US$10 million payable 24 months following closing (March 16, 2022); US$10 million payable 48 months following closing (March 16, 2024); and US$10 million payable 60 months following closing (March 16, 2025). The operation is located in the mineral rich and prolific Deseado Massif in the province of Santa Cruz, Argentina. MDN consists of an open pit gold mine with an associated 1,000 tpd carbon in leach (CIL) gold recovery plant, targeting to produce 50-60koz/yr gold doré per annum. Current operations are focused on two mining areas, La Paloma and Martinetas, with material processed at a central plant facility. The project has significant exploration potential with a land package in excess of 273,000 ha’s.
Construction of mine and related facilities was completed in 2017 and the operations have been ramping up to full capacity during 2018 and 2019. The project currently supports 325 employees and contractors on a fly-in fly-out basis. Don Nicolas has strong local and regional backing having signed agreements with the two neighboring communities and has received strong support from the government of Santa Cruz.
The gold deposits at MDN are classified as an epithermal gold vein style of deposit typical of the region which is host to numerous large-scale gold operations. Cerrado has commenced a new exploration program to confirm the current resource base and to focus on expanding the mine life through further exploration on surface and at depth.
The MDC project is located in the state if Tocantins, Brazil, immediately east of the town of Monte do Carmo. Currently work has focused on the Serra Alta deposit, however, numerous analogs remain to be fully defined. The Monte do Carmo property consists of 11 exploration permits totaling 52,213 ha’s. The property has access to excellent local infrastructural with limited garimpeiro activity on site and strong local support from the community.
Regional investment in mineral exploration in the area, by others, is reported to have amounted to US$4.7 million from 1985 through 1995, and over US$20.0 million from 1996 to 2018 by various operators.
Cerrado acquired the MDC project from Monte Sinai Mineracao Ltda (“Monte Sinai‘) in 2017 and since then has undertaken various drilling and other exploration activities on site over the past couple of years. To date a mineral resource report prepared in accordance with NI 43-101 dated December 5, 2018 has outlined an initial mineral resource of 13.7 million tonnes grading 1.85 g/t, for contained gold of 813,000 oz. Continued exploration is planned at Serra Alta and the surrounding area with the objective to rapidly expand this mineral resource base to support a significant open pit mining operation.
The technical information contained in this news release was reviewed and approved by Robert Campbell (M.Sc., P.Geo) who is a Qualified Person (“QP“) under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101“).
About BB1
BB1 is a capital pool company within the meanings of the policies of the TSXV and does not have any operations and has no assets other than cash. BB1’s business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV.
Forward Looking Information, Disclaimer and Reader Advisory
All information provided in this press release relating to Cerrado has been provided by management of Cerrado and has not been independently verified by management of the Company. As the date of this press release, the Company has not entered into a Definitive Agreement with Cerrado, and readers are cautioned that there can be no assurances that a Definitive Agreement will be executed.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This press release contains statements that constitute “forward-looking information” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation, All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the exchange of the Special Warrants into Cerrado Shares, the terms, conditions, and completion of the Transaction; use of funds; and the business and operations of the Company upon completion of the Transaction. In making the forward- looking statements contained in this press release, the Company has made certain assumptions, including that: due diligence will be satisfactory; all applicable shareholder, and regulatory approvals for the Transaction will be received. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: results of due diligence; availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.
For more information please contact BB1’s Chief Executive Officer, Stephen Shefsky at +1-416-366-4200 or Cerrado’s Co-Chairman and CEO, Mark Brennan at +1-647-796-0023.
Not for dissemination in the United States or for distribution to U.S. newswire services. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or any applicable state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, a person in the United States or a U.S. person (as defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act, and any applicable state securities laws, or compliance with an exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/63690
In the fast-paced world of financial technology, shifts occur daily as companies strive for innovation, customer satisfaction, and enhanced market reach. Today’s briefing covers a spectrum of developments, from Visa Direct’s groundbreaking integration in Korea to challenges plaguing the app economy. We’ll also touch on recent acquisitions, strategic partnerships, and expansions in fintech ecosystems. Here’s what you need to know about today’s most pressing fintech trends.
Visa Direct’s Milestone in South Korea: SentBe’s Card Transfer Service Launch
South Korea’s fintech ecosystem has taken a notable leap forward with SentBe’s implementation of Visa Direct’s Card Transfer Service. This collaboration marks a milestone, positioning SentBe as the first Korean fintech company to offer card-to-card international money transfers, a feature in high demand given the rise in cross-border financial activities. Visa Direct’s real-time card-to-card transfers are a potential game-changer for consumers and businesses alike, facilitating faster and more secure global transactions.
The collaboration exemplifies Visa’s larger strategy of partnering with regional fintech players to broaden its influence across Asia’s dynamic fintech markets. By tapping into SentBe’s growing customer base and extensive user insights, Visa is embedding itself deeper into local markets, simultaneously offering Korean users a more streamlined and efficient money transfer experience.
The service’s design allows individuals and small businesses alike to benefit from quicker transaction processing times, marking a significant evolution from traditional remittance processes that rely on intermediary banks. The move is especially critical in a digital age where customer expectations lean heavily towards instant, seamless financial interactions.
Source: Electronic Payments International
Fintech App ‘Trap’ Enrages Consumers Struggling to Cancel Subscriptions
In the modern subscription-based economy, some fintech companies are facing backlash over what customers perceive as the ‘trap’ of endlessly renewable subscriptions that are nearly impossible to cancel. A recent expose revealed mounting frustrations among consumers who signed up for digital services but later found themselves locked into subscriptions they could not easily terminate. The piece highlights the darker side of user retention strategies deployed by some companies to mitigate churn by making cancellation processes intentionally convoluted.
The app-based economy relies on recurring revenue, which remains a vital lifeline for startups and established firms alike. However, industry insiders argue that lack of transparency and difficult cancellation processes have an adverse impact on customer trust, leading to a growing dissatisfaction that may ultimately backfire on these companies. As consumers grow more savvy, fintechs relying on these practices could risk higher attrition rates, regulatory scrutiny, and brand erosion.
This emerging issue has raised questions about ethical standards and customer-centric models in fintech. As competition intensifies, companies must balance growth with transparent practices that foster customer loyalty, rather than coercion.
Source: Forbes
Pinwheel and Terafina Partner to Streamline Omnichannel Customer Onboarding
Pinwheel, a fintech infrastructure company known for its payroll and income data connectivity solutions, recently announced a partnership with Terafina, a leader in omnichannel sales and service platforms for financial institutions. This collaboration aims to simplify and enhance the onboarding process for new customers, providing them with seamless experiences across multiple channels, whether online, mobile, or in-branch.
The partnership combines Pinwheel’s data integration capabilities with Terafina’s expertise in customer onboarding, allowing financial institutions to create more personalized and flexible account opening processes. With consumer expectations evolving towards instant service and mobile-first access, this integration empowers banks and credit unions to meet these needs by delivering cohesive and smooth digital onboarding journeys.
In an industry where customer acquisition and retention are increasingly dependent on first impressions, the significance of streamlined onboarding cannot be overstated. By improving access to real-time employment and income data, this partnership enhances user verification and compliance while also allowing institutions to better assess applicants’ creditworthiness, which is crucial in today’s lending environment.
Source: PR Newswire
nCino Acquires FullCircl in $135 Million Deal: Expanding the Scope of Relationship Management
Fintech giant nCino recently completed its acquisition of FullCircl, a move that underscores its ambition to broaden its reach in the financial services sector. FullCircl, known for its focus on customer relationship management (CRM) solutions tailored to financial institutions, brings a robust set of tools that will allow nCino to enhance its cloud-based banking platform. The acquisition, valued at $135 million, positions nCino as a stronger player in the relationship management space, especially crucial for institutions looking to build deep, long-term client relationships.
With this acquisition, nCino aims to expand its footprint in Europe and boost its offerings in the CRM space, providing banks and credit unions with innovative tools for client engagement and retention. The integration of FullCircl’s CRM capabilities will also support nCino’s existing portfolio, which includes loan origination and digital banking solutions, strengthening its position as a one-stop platform for financial institutions.
This acquisition is part of a growing trend of consolidation in the fintech sector, where larger firms acquire specialized players to fill critical service gaps and offer more comprehensive solutions. By building a holistic platform that spans multiple functionalities, nCino is better equipped to compete in the increasingly crowded digital banking software market.
Source: The Paypers
DriveWealth’s European Expansion: A Strategic Base in Lithuania
DriveWealth, a digital brokerage technology firm, has chosen Lithuania as the launchpad for its European operations. By establishing a base within Lithuania’s burgeoning fintech hub, DriveWealth is strategically positioning itself to tap into the European market, leveraging the country’s favorable regulatory environment and proximity to major EU economies.
The expansion is particularly significant given the increasing demand in Europe for retail investing platforms that provide accessible and affordable market entry. DriveWealth’s solutions enable digital brokers and financial platforms to offer customers fractional shares and real-time trading experiences, which have proven highly popular in markets like the U.S. This move aligns with DriveWealth’s long-term growth strategy and its commitment to democratizing access to investing across the globe.
Lithuania’s supportive regulatory framework and well-developed fintech infrastructure make it an ideal location for DriveWealth’s entry into Europe. The country’s fintech-friendly policies allow innovative financial service providers to set up and scale efficiently. DriveWealth’s presence in Lithuania not only adds to the growing cluster of fintech firms but also reinforces the country’s reputation as a rising fintech powerhouse within the EU.
Source: Finance Magnates
Key Takeaways and Strategic Insights
As seen from today’s top stories, several overarching themes shape the fintech landscape:
- Global Partnerships and Local Expansion: Visa’s collaboration with SentBe exemplifies how partnerships enable fintech firms to break into regional markets by addressing specific customer needs.
- Transparency in Subscription Models: The customer backlash against difficult-to-cancel fintech services raises concerns about the sustainability of current subscription models.
- Innovation in Customer Onboarding: Pinwheel and Terafina’s partnership highlights the importance of streamlined onboarding processes as a means to increase customer satisfaction and improve retention.
- Mergers and Acquisitions to Fill Service Gaps: nCino’s acquisition of FullCircl illustrates a broader trend of consolidation, where fintech companies acquire specialized players to broaden their product portfolios.
- Regional Hubs as Strategic Launch Pads: DriveWealth’s decision to establish a base in Lithuania underscores the importance of regional fintech hubs in providing a supportive environment for global expansion.
Today’s roundup underscores the adaptability of fintech companies as they navigate emerging challenges and opportunities. From addressing regional financial needs to innovating customer experience, fintech firms continue to redefine what it means to engage in modern finance. As the industry grows, so too does the necessity for ethical practices, robust infrastructure, and agile customer solutions. In this competitive environment, the companies that prioritize transparency, customer satisfaction, and strategic expansion will set the standard for the future of finance.
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Fintech
Fintech Pulse: A Snapshot of Global Expansion, Regulatory Moves, and Transformative Tech in Fintech
In today’s fast-paced fintech ecosystem, the global narrative is pivoting towards integration, regulation, and technological advancement as new entrants aim for U.S. markets, emerging startups seek growth capital, and financial giants align with innovative trends. Here’s a breakdown of recent developments that underline the dynamism in fintech and the paths to profitability and compliance as technologies reshape financial services globally.
Singapore’s MAS Advocates for a Borderless Fintech Network
The Monetary Authority of Singapore (MAS) recently emphasized the importance of cross-border collaboration in the global fintech ecosystem, with chairman Ravi Menon outlining a vision for a seamless fintech network. This network would transcend geographic and regulatory boundaries, allowing Singapore and its fintech entities to engage in mutually beneficial partnerships worldwide. Menon highlighted that Singapore’s strategic geographic position and regulatory environment make it a natural hub for fintech collaborations that advance financial inclusion and foster innovation.
This call for a borderless approach underscores the need for interoperability among financial systems globally, particularly as digital payments and decentralized finance become increasingly prevalent. Singapore’s initiatives signal that regions with supportive fintech policies can potentially drive new growth avenues in the digital economy.
Source: Channel News Asia
Thredd’s McCarthy to Fintech Entrants: Be Sponsor-Bank Ready for the U.S. Market
Fintech firms eyeing the U.S. market face a challenging regulatory landscape. John McCarthy of Thredd advises that those looking to enter the U.S. market should prioritize establishing sponsor-bank partnerships. The U.S. regulatory framework mandates that fintech companies collaborate with sponsor banks to access the financial system, making this step a critical milestone for fintechs aiming to operate stateside.
McCarthy’s guidance highlights an increasingly common barrier for fintech companies: navigating complex regulatory requirements to gain a foothold in the lucrative U.S. financial sector. For many, this means rethinking business models to comply with financial regulations, even as they innovate. This approach has led several fintech firms to secure sponsorship deals with established banks, enabling them to deliver compliant financial services to U.S. consumers.
Source: PYMNTS
Spidr Fintech Lands Funding to Drive Growth with Wells Fargo Backing
Spidr, a rising fintech star, has successfully raised capital, attracting the attention of Wells Fargo and other financial institutions. The fresh funding will fuel Spidr’s ambitious expansion plans, further positioning it as a formidable player in the fintech space. This backing from Wells Fargo represents a trend where major financial institutions are investing in or partnering with fintech startups to gain a competitive edge and meet evolving consumer expectations.
For Spidr, the capital injection aligns with a robust strategy for market penetration, and it’s an opportunity to leverage Wells Fargo’s extensive network and resources. Spidr’s latest round of funding signifies that traditional banks are increasingly open to collaborations with fintech entities, a trend that is reshaping the financial services landscape as banks seek to stay competitive in the digital age.
Source: Charlotte Business Journal
Elphinstone’s Trikl: Innovating Digital Payments in MENA
Elphinstone, a digital payments startup based in MENA, is introducing its innovative solution, Trikl, aimed at transforming payments across the region. The startup’s recent developments underscore its commitment to creating accessible and user-friendly payment systems tailored for the MENA market’s unique dynamics. By addressing specific needs such as currency exchange complexities and local payment preferences, Trikl is positioning itself as a key player in the digital payments landscape.
Trikl’s approach is particularly noteworthy as it caters to the MENA market’s diverse consumer base and taps into the region’s growing appetite for digital financial services. This development represents a promising advancement in digital payment solutions, fostering greater financial inclusion and enabling smoother transactions across borders in MENA.
Source: Menabytes
Hong Kong Sets Rules on Responsible AI to Get Ahead of Disruptive Tech
Hong Kong has unveiled regulatory guidelines on responsible AI use, a proactive move that places it among the leading jurisdictions in AI governance. This development signals Hong Kong’s recognition of the transformative impact of AI on financial services, as it sets clear boundaries on how AI can be used responsibly in financial applications. With AI continuing to disrupt financial services, responsible usage is becoming a priority, particularly in regions where financial systems are heavily reliant on technology.
These guidelines aim to balance innovation with accountability, addressing concerns over data privacy, ethical considerations, and risk management. Hong Kong’s stance on AI regulation reflects its commitment to safeguarding both consumers and financial institutions, setting a high standard for other regions to emulate in terms of regulatory foresight.
Source: South China Morning Post
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The Changing Landscape of Global Fintech
The financial technology (fintech) industry continues to evolve at a rapid pace, making headlines worldwide. Today’s briefing dives into transformative moves and strategic shifts within fintech companies across diverse geographies. From innovative alliances to prominent executive appointments and ambitious expansions into banking, the industry is positioning itself for a future that intertwines financial inclusivity, regulatory compliance, and customer-centric technology. Let’s unpack these developments.
XTransfer’s Hong Kong Fintech Week Entry: Scaling Financial Access in China
XTransfer, a Shanghai-based cross-border financial services firm, has joined the Hong Kong Fintech Week to showcase its solutions, marking a significant milestone in its journey to bridge financial gaps for small and medium-sized enterprises (SMEs) in China. Founded in 2017, XTransfer addresses common barriers faced by Chinese SMEs in accessing international financial networks due to regulatory complexities. The firm’s platform facilitates smoother cross-border transactions by helping businesses navigate regulatory and compliance challenges seamlessly.
The strategic choice to participate in Hong Kong Fintech Week highlights XTransfer’s commitment to strengthening connections within the Asian financial hub. The firm seeks to tap into the region’s wealth of potential clients and partners, as Hong Kong continues to be a pivotal gateway for businesses engaging in cross-border trade with China. The move is also symbolic of the broader fintech community’s push to create inclusive and accessible financial networks, even amid evolving regulatory landscapes.
Source: XTransfer Joins Hong Kong Fintech Week to Expand Global Presence (Yahoo Finance)
Propelld’s New Chief Business Officer: Driving Growth and Product Innovation
Propelld, an Indian ed-finance company, recently appointed Manoj Shetty as its new Chief Business Officer (CBO), signaling a strong commitment to enhancing its market penetration and product offerings. Known for his extensive experience in fintech, particularly in business development and scaling, Shetty is expected to spearhead Propelld’s ambitions to bring tailored financing solutions to India’s education sector.
Propelld focuses on providing student loans and education financing to underserved sections of India, leveraging advanced data analytics to assess borrowers’ potential rather than conventional credit scores. Shetty’s addition to the leadership team suggests that Propelld aims to double down on its innovative data-driven model to better serve the unique financial needs within education.
As the industry grows more competitive, having a seasoned executive like Shetty could be instrumental for Propelld to fortify its unique value proposition. His track record indicates a capacity for handling the nuanced needs of financial services catering to niche markets, and he may well position Propelld to scale sustainably in the expanding ed-finance space.
Source: Propelld Names Manoj Shetty as Chief Business Officer (IBS Intelligence)
Solo Funds Faces Legal Hurdles: The Class-Action Lawsuit Dilemma
In a move that could impact peer-to-peer lending’s regulatory path, Solo Funds faces a class-action lawsuit, alleging that the company’s lending practices breached consumer protection laws. As a platform designed to offer emergency loans to consumers facing cash flow issues, Solo Funds charges “tips” rather than conventional interest rates, a tactic intended to circumvent traditional lending regulations. However, plaintiffs argue that these tips effectively function as disguised interest, making Solo Funds’ practices deceptive and exploitative.
This lawsuit is a critical test for the burgeoning peer-to-peer lending segment, which has grown immensely in recent years as consumers seek alternatives to traditional financial institutions. The outcome may force similar platforms to reassess how they balance operational flexibility with regulatory compliance, potentially reshaping the industry’s approach to short-term lending.
With growing scrutiny on fintech lending platforms, the legal proceedings could also open a wider debate on how fintech firms should transparently operate within the bounds of financial laws. If Solo Funds is found liable, it may prompt stricter regulatory frameworks, affecting peer-to-peer platforms that rely on nontraditional models to attract users.
Source: Lending Fintech Solo Funds Faces Class-Action Lawsuit (TechCrunch)
Slice’s Transformation: A Fintech Company’s Foray into Traditional Banking
India-based Slice, originally a credit-based fintech, has announced its transition into a full-fledged bank, allowing it to offer conventional banking services in addition to its credit solutions. By securing regulatory approval to operate as a bank, Slice aims to expand its product range and deepen its relationship with a fast-growing consumer base in India. This move exemplifies a larger trend of fintech firms seeking to bridge the gap between traditional banking and innovative financial services.
Slice’s venture into banking will also set an intriguing precedent for other fintech companies in India and beyond. The company has successfully carved a niche among young users with its simple, digital credit products. As a bank, it can now offer savings accounts, lending products, and other services, thus creating a one-stop platform that could enhance customer retention and lifetime value.
The expansion to full banking status raises questions about how effectively Slice will manage its dual roles as a fintech innovator and a traditional bank, especially in a market as large and complex as India’s. It also marks a pivot point in the narrative of fintech companies morphing into full-service financial institutions, a trend that is gaining traction globally.
Source: India Fintech Slice Expands to Become a Bank (TechCrunch)
FullCircl’s 2025 Identity Verification Report: Insights into Compliance Challenges
FullCircl, a leading regulatory technology provider, recently released its “2025 State of Identity Verification” report, shedding light on the evolving landscape of identity verification and the challenges businesses face in maintaining compliance. As financial crimes become more sophisticated, firms increasingly invest in identity verification tools to stay ahead. According to the report, over 75% of financial institutions rank identity verification as a critical priority, citing the surge in fraudulent activities as a prime concern.
The report also highlights an industry-wide push towards digital identity systems and the use of artificial intelligence in detecting fraud patterns. As regulatory demands tighten and compliance risks rise, firms are urged to adapt swiftly. FullCircl’s findings underscore a need for seamless, real-time verification solutions that do not compromise customer experience—a delicate balance to maintain as identity verification protocols become more stringent.
The insights from FullCircl’s report reveal a heightened industry focus on ensuring robust identity frameworks that foster trust without hindering the ease of digital transactions. This growing demand aligns with broader trends where digital trust is crucial in retaining customers and enhancing their satisfaction.
Source: FullCircl Releases 2025 State of Identity Verification Report (PR Newswire)
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