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WonderFi, Coinsquare and CoinSmart Announce Closing of Business Combination

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Historic transaction establishes WonderFi as one of the largest regulated crypto investing ecosystems in Canada with over 1.6 million registered users

Toronto, Ontario–(Newsfile Corp. – July 10, 2023) – WonderFi Technologies Inc. (TSX: WNDR) (OTCQB: WONDF) (WKN: A3C166) (“WonderFi“), Coinsquare Ltd. (“Coinsquare“) and CoinSmart Financial Inc. (“CoinSmart“) are pleased to announce that WonderFi, Coinsquare and CoinSmart, further to their news releases dated April 3, 2023, June 20, 2023 and June 27, 2023, have closed their business combination transaction (the “Transaction“) pursuant to the business combination agreement dated April 2, 2023 (the “Business Combination Agreement“), positioning the resulting entity, WonderFi Technologies Inc., and its registered operating subsidiaries, to offer one of the largest registered crypto asset trading ecosystems in Canada and to provide Canadians with a wide range of diversified products and services including both retail and institutional crypto trading, staking products, B2B crypto payment processing and soon also sports betting and gaming.

This news release constitutes a “designated news release” for the purposes of WonderFi’s prospectus supplement dated December 23, 2022 to its short form base shelf prospectus dated September 7, 2022.

Key Transaction Benefits

  • With a collective user base of over 1.6 million registered Canadians and combined assets under custody exceeding $600 million, WonderFi boasts one of the largest communities of crypto investors within a single regulated ecosystem in Canada.
  • WonderFi now holds a 43% ownership stake in Tetra Trust Company, Canada’s first and only trust company licensed to custody digital assets.

  • WonderFi’s new crypto payment solution, SmartPay, is its answer to the burgeoning crypto payment landscape.

“WonderFi is emerging from this transformational transaction with a strong balance sheet that will enable us to execute on our core strategy,” shared WonderFi President and Interim-Chief Executive Officer, Dean Skurka. “In the evolving digital asset industry, WonderFi is exceptionally positioned as the owner of some of the most respected and regulated crypto trading platforms globally. With our firmly established position, WonderFi is excited for its next chapter as we integrate our 1.6 million registered users, cross-sell services across our diversified suite of products and add to our portfolio of innovative products.”

SmartPay

As the global adoption of digital assets continues to grow, the use cases for them, particularly in facilitating payments, are experiencing significant growth across various sectors, including e-commerce, gaming, content creation, and emerging industries. CoinSmart’s crypto payments solution, SmartPay, has successfully processed over one million transactions to date.

“WonderFi’s dedication to expanding our footprint in the crypto payments space exemplifies our commitment to innovation and growth,” added Skurka.

One Step Ahead

“In the rapidly evolving digital asset sector, WonderFi holds an exceptional position as one of the most regulated crypto trading ecosystems globally,” said WonderFi strategic investor, Kevin O’Leary. “This is a major advantage as unregistered international exchanges can no longer serve the Canadian market without adhering to local regulations. In the past, operating a registered cryptocurrency platform posed a disadvantage compared to competitors who could offer services without the burden of compliance costs. However, those days are now behind us. Now more than ever, investors are actively seeking trading platforms that operate in harmony with regulators. Through consolidation, WonderFi has been one step ahead every step of the way.”

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Transaction Details

The following is a general summary of the Transaction. For further details, see the joint management information circular of WonderFi, Coinsquare and CoinSmart dated May 12, 2023, and filed under WonderFi’s profile on the SEDAR website at www.sedar.com:

  • The Transaction was completed pursuant to two separate court-approved plans of arrangement involving Coinsquare and CoinSmart, respectively.

  • Pursuant to the Transaction, WonderFi issued 270,920,353 common shares to Coinsquare’s shareholders (representing an exchange ratio of 6.946745 WonderFi shares for each Coinsquare share held), and 117,924,334 common shares to CoinSmart’s shareholders (representing an exchange ratio of 1.801462 WonderFi shares for each CoinSmart share held).

  • Immediately after giving effect to the Transaction, existing WonderFi shareholders own approximately 38% of WonderFi, former Coinsquare shareholders own approximately 43% of WonderFi, and former CoinSmart shareholders own approximately 19% of WonderFi.

  • Mogo Inc. becomes the largest shareholder of WonderFi, owning approximately 14% of the common shares of WonderFi.

  • CoinSmart shareholders also received 65,460,350 earnout rights as part of the Transaction, entitling them to receive their proportionate interest of up to an additional $15 million of total consideration in an earn out, payable in cash or a combination of cash and common shares of WonderFi, based on the revenues of CoinSmart’s SmartPay business (over a period of three years following the closing of the Transaction).

  • An aggregate of 15,863,554 common shares of WonderFi were also issued to certain advisors of the three companies in settlement of certain obligations in connection with the Transaction.

  • An aggregate of 11,294,356 new WonderFi stock options were issued pursuant to WonderFi’s existing incentive plan to former holders of stock options of Coinsquare and CoinSmart that were not “in-the-money” on the date of the Business Combination Agreement, exercisable until April 2, 2028. The exercise prices for these options range from $0.17 to $0.30, with the weighted average exercise price equaling $0.26 per share.

  • The exercise prices of existing WonderFi stock options were repriced to an exercise price of $0.30 per share, provided that such existing stock options had an exercise price greater than $0.30 per share prior to the completion of the Transaction.

  • The directors, officers and principal shareholders of Coinsquare and the principal shareholders of CoinSmart are subject to lock-up arrangements, pursuant to which their WonderFi shares will become freely tradeable in tranches over an 18-month period after the closing of the Transaction. All other Coinsquare shareholders will be subject to lock-up arrangements, pursuant to which their WonderFi shares will become freely tradeable in tranches over a 12-month period after the closing of the Transaction.

  • Pursuant to investor rights agreements and a voting agreement among certain shareholders of WonderFi, Coinsquare and CoinSmart, until the later of: (i) April 2, 2025, and (ii) the second annual general meeting of WonderFi following the effective date at which directors are elected to the WonderFi board of directors (“WonderFi Board“), each of them shall vote all of their WonderFi shares in favour of the size of the WonderFi board being set at and remaining at nine (9) directors and in favour of one another’s WonderFi Board nominees for election to the WonderFi Board. The WonderFi shareholders party to the investor rights agreement are entitled to two nominees to the WonderFi Board, the CoinSmart parties to one nominee, and Mogo Inc. is entitled one nominee to the WonderFi Board

  • On closing, WonderFi’s board of directors was reconstituted, with Robert Halpern, Justin Hartzman, Christopher Marsh, G. Scott Paterson, Wendy Rudd, Dean Skurka, Nicholas Thadaney, Jason Theofilos, and Michael Wekerle being appointed as directors.

Early Warning System Matters regarding CoinSmart

Pursuant to National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues and in connection with the filing of an Early Warning Report regarding the acquisition by WonderFi of all the common shares of CoinSmart, a corporation incorporated under the laws of British Columbia, with its securities trading until completion of the Transaction on the NEO Exchange under the symbol “SMRT” and having a head office located at 1075 Bay Street, Unit 301, Toronto, Ontario, M5B 2B2, Canada, WonderFi advises as follows:

On July 7, 2023, WonderFi, of 341-110 Cumberland St., Toronto, Ontario, M5V 3V5, acquired 65,460,350 common shares of CoinSmart in connection with the implementation of a plan of arrangement of CoinSmart under the Business Corporations Act (British Columbia), in consideration of the issuance of: (i) an aggregate of 117,924,334 common shares of WonderFi (having a market value of $20,636,758 based on the closing price of the common shares of WonderFi on the Toronto Stock Exchange of $0.175 on July 7, 2023), being 1.801462 common shares of WonderFi for each CoinSmart common share so acquired and (ii) one earnout right for each CoinSmart common share so acquired (generally defined as a right to share proportionately in up to an additional $15 million of total consideration, which may be paid by WonderFi in cash or a combination of cash and common shares of WonderFi, based on the revenue of CoinSmart’s SmartPay business over a period of three years following implementation of the CoinSmart plan of arrangement).

Immediately prior to the Transaction, WonderFi held, directly or indirectly, or exercised control or direction over, nil common shares of CoinSmart. After giving effect to the Transaction, WonderFi acquired control and ownership over an aggregate of 65,460,350 common shares of CoinSmart, representing 100% of CoinSmart’s issued and outstanding common shares.

WonderFi acquired CoinSmart for investment purposes in addition to WonderFi’s belief that the acquisition adds complementary services and a new client base to WonderFi, accelerating the growth of WonderFi’s full service Web3 retail platform. Through the acquisition of CoinSmart’s crypto asset trading platform, WonderFi gains access to a new client base and intends to realize cost synergies through its integration. The addition of the SmartPay service enables WonderFi to realize its goal of expanding its Web3 retail platform into the payments vertical.

A copy of the Early Warning Report disclosing the Transaction in respect of CoinSmart will be filed on WonderFi’s SEDAR profile at www.sedar.com and can be obtained from WonderFi at 341-110 Cumberland St., Toronto, Ontario, M5V 3V5, attention: Alexander Davis, or phone: 647-878-1441.

Financial Advisors and Counsel

Bobby Halpern of Halpern & Co. acted as lead special advisor to WonderFi. In connection with the Transaction, WonderFi engaged Haywood Securities Inc. to act as financial advisor and provide a fairness opinion, and Cassels Brock & Blackwell LLP as its legal advisor. Coinsquare engaged Origin Merchant Partners as its financial advisor and Goodmans LLP as its legal advisor. CoinSmart engaged Eight Capital as its financial advisor and Wildeboer Dellelce LLP as its legal advisor.

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ABOUT WONDERFI

WonderFi aims to revolutionize access to digital assets by operating its four registered Canadian-owned and operated crypto asset trading platforms: Bitbuy, Coinsquare, CoinSmart, and Coinberry. With a collective user base of over 1.6 million registered Canadians and a combined assets under custody exceeding $600 million, WonderFi boasts one of the largest communities of crypto investors within a single regulated ecosystem in Canada.

WonderFi’s global crypto payment processing division, SmartPay, enables seamless digital asset payments across a range of industries. With a track record of consistent growth and unwavering commitment to excellence, SmartPay has successfully processed over one million transactions to date.

WonderFi remains devoted to offering its users access to new regulated verticals, designed to empower the generation of modern wealth. For further information about WonderFi, please visit www.wonder.fi.

Additional Information

For additional information, please contact:

Media / Investor Relations
Binu Koshy
[email protected]

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the beliefs of WonderFi Technologies Inc. (“WonderFi” or the “Company”) regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such “could”, “intend”, “expect”, “believe”, “will”, “projected”, “planned”, “estimated”, “soon”, “potential”, “anticipate” or variations of such words.

By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, the Company has made certain assumptions. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: the inability of the Company to integrate successfully (including the retention of key employees) such that the anticipated benefits of the Transaction are realized; the ability to realize synergies and cost savings at the times, and to the extent, anticipated; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, employees, suppliers, customers, competitors and other key stakeholders; the inability of the Company to obtain the necessary regulatory, stock exchange, shareholder and other approvals which may be required for matters subsequent to closing of the Transaction; the inability of the Company to meet its expected go-live timing for iGaming, sports betting, stock trading and yield products, each of which may be subject to additional regulatory or other approvals which may be required in connection therewith; the ability of the Company to consolidate its registered crypto asset trading businesses under Coinsquare’s Canadian Investment Regulatory Organization investment dealer registration, including obtaining requisite regulatory approvals in connection therewith; the ability of SmartPay to generate the revenues required to entitle CoinSmart shareholders to payments pursuant to their earnout rights; the inability of the Company to work effectively with strategic investors and partners, and any changes to key personnel; security and cybersecurity threats and hacks; internet and power disruptions; uncertainty about the acceptance or widespread use of digital assets; failure to anticipate technology innovations; the COVID-19 pandemic; climate change; currency risk; changes in or enforcement of national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices and political or economic developments in Canada, the United States, Europe and other jurisdictions in which the Company carries on business or in which the Company may carry on business in the future; and material adverse changes in general economic, business and political conditions, including changes in the financial markets and compliance with extensive government regulation. These risks are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein. The impact of any one assumption, risk, uncertainty, or other factor on a particular forward-looking statement cannot be determined with certainty because they are interdependent and the Company’s future decisions and actions will depend on management’s assessment of all information at the relevant time. A more fulsome description of risk factors that may impact business, financial condition and results of operation with respect to WonderFi is set out in its management’s discussion and analysis and financial statements for the period ended March 31, 2023, as well as its annual information form and the joint management circular of WonderFi, Coinsquare and CoinSmart in respect of the Transaction, available on its SEDAR profile at www.sedar.com.

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Although the Company believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice. All financial amounts referenced herein are in Canadian dollars unless otherwise expressly identified.

The Toronto Stock Exchange has not approved or disapproved of the information contained in this release.

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To view the source version of this press release, please visit https://www.newsfilecorp.com/release/172903

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Fintech Pulse: Your Daily Industry Brief – Breaking Trends and Insights in Fintech

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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.

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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.

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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:

  1. 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.
  2. Transparency in Subscription Models: The customer backlash against difficult-to-cancel fintech services raises concerns about the sustainability of current subscription models.
  3. 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.
  4. 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.
  5. 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 Pulse: A Snapshot of Global Expansion, Regulatory Moves, and Transformative Tech in Fintech

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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.

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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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Fintech Pulse: Today’s Key Industry Developments, Appointments, and Regulatory Challenges

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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)

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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.

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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)

 

 

The post Fintech Pulse: Today’s Key Industry Developments, Appointments, and Regulatory Challenges appeared first on HIPTHER Alerts.

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