Hey all, Jason here.

In this episode, I had the exclusive chance to chat with Current’s CEO Stuart Sopp and CTO Trevor Marshall on the company’s $80 million Series E, led by Springcoast Partners, announced earlier today. We also discussed:

• Current’s expanded product suite and impressive 70% growth for the third year in a row

• The role AI has played across the company’s business and how Stu and Trevor think about cost discipline and “return on tokens”

• Current’s expanded financing facility with bank partner Cross River and General Catalyst

• How Stu and Trevor think about the latest wave of foreign fintechs entering the U.S.

• How the “K-shaped” economy and renewed inflation are impacting everyday American consumers

• And on building a sustainable business that’s ready for the public markets

My apologies for the sub-optimal weather to folks who made the trip from the U.S. to Amsterdam for Money20/20 — the week before you came was the best possible late spring weather you could ask for here! Try again next year, I suppose.

For my AML, data and agentic AI folks, Castellum.AI is hosting a webinar later this month on “The Data Foundation: Driving Effective AI Agents in AML.” With speakers from Stripe, FinWise, and Hummingbird, it looks like a can’t-miss session.

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Sen. Warren, CFPB Pressure Bilt to Compensate Users Impacted by Rocky Transition

Neighborhood loyalty and rewards startup Bilt seems to have largely resolved the issues that frustrated some users as it migrated to its “Bilt 2.0” offering.

During that transition this February and March, users took to social media to voice complaints about a variety of problems they were experiencing, including:

• Users who were declined for the new card or received a credit limit substantially lower than they had previously;

• What users viewed as an excessively complicated rewards earning and redemption structure;

• Users experiencing declined transactions and frozen cards, including during a promotional period when Bilt was offering a higher rate of points on certain transactions;

• Users who claim outstanding balances were transferred from Wells Fargo to the new cards without their permission;

• Users who complain they’ve experienced difficulties making payments on outstanding balances still held at Wells Fargo;

• Users who claim they received a new Wells Fargo Autograph card they didn’t want or authorize;

• Users who say older statements they needed for financial tracking/planning and tax prep disappeared from the Bilt app;

• Users who believe they should have qualified for a special promotion offered if they signed up for Bilt 2.0 through a link on The Points Guy website, but didn’t;

• Users who reported difficulty in linking bank accounts to Bilt;

• Users who reported not receiving their physical Bilt card or receiving it with incorrect/incomplete details printed on the card;

• and, perhaps the issue that drove the most frustration and outrage, issues with rent and mortgage payments not being made, being delayed, or bouncing, with some users reporting their external bank account had been debited by Bilt, but the corresponding payment was never made to their landlord or mortgage servicer.

Bilt users who raised issues through the company’s app reported frustrating and, at times, nonsensical interactions with Bilt’s AI-powered customer service chatbot. Those trying to reach a human Bilt support representative could only do so via email and many reported days-long waits to get a response.

With the number of service providers in the mix — Column as Bilt’s new card issuer, Cardless as its new servicer, plus the legacy Wells Fargo accounts and newly issued Wells Fargo Autograph cards — some users were frustrated by what they perceived as finger pointing between the various firms’ customer service teams, with seemingly no one taking responsibility for resolving users’ issues.

The Bilt situation caught the attention of Senator Elizabeth Warren (D-MA), the ranking member on the Senate Banking Committee, who sent Bilt a letter (which extensively cites Fintech Business Weekly’s reporting) at the end of May over how the company has handled the rocky transition and its impact on users.

Warren’s letter to Bilt CEO Ankur Jain poses questions on a number of areas of potential consumer harm:

• Bilt appears to have lost, delayed the delivery of, or made it impossible for customers to access their rent or mortgage funds.

• Bilt is now partnering with Evolve Bank, which was at the center of a major scandal involving nearly $100 million in lost customer funds in 2024.

• Bilt 2.0 immediately debits rent payments, raising questions about compliance with the Credit CARD Act of 2009.

• Bilt’s use of an AI chatbot has made it inaccessible to consumers and appears to provide terrible customer support.

People familiar with Bilt’s program told Fintech Business Weekly that Bilt has been steadily winding down its relationship with Evolve since 2022. The most recent terms and conditions posted on Bilt’s site, updated last week, make no mention of Evolve.

Warren’s letter requests a variety of information and data from Bilt, including:

• Bilt’s understanding of what may have led to customers experiencing allegedly lost, delayed, or returned housing payments and how Bilt has responded to each issue;

• What steps Bilt intends to take to improve its customer service;

• How Bilt’s new card and housing payment practices are compliant with the CARD Act of 2009;

• The number of customers who had a rent or mortgage payment debited from their account that was not returned to the customer or delivered to their landlord or lender as of April 30, 2026, and the total dollar amount of such payments;

• The number of customers who had a rent or mortgage payment debited from their account that was later returned to the customer and the total dollar amount of such payments;

• and the number of customers who had a rent or mortgage payment debited from their account that was not delivered to their landlord or lender within 72 hours and the total dollar amount of such payments.

In a highly unusual move, the Consumer Financial Protection Bureau — itself the brainchild of Warren, before she became a Senator — weighed in publicly, releasing a brief statement on its website about how the CFPB is addressing the Bilt situation.

The statement, published on Tuesday, June 2nd, says in part (emphasis added):

The CFPB has been working to ensure consumers affected by Bilt’s transition to a new bank partner are appropriately remedied. CFPB officials met with Bilt to understand the issues caused by the transition and what steps Bilt has taken to ensure customers affected by challenges with the transition were made whole.

Following our discussions and at our direction that Bilt ensures full redress, Bilt notified the CFPB that they proactively reached out to the limited number of potentially-affected customers and offered to reimburse them for any overdraft fees, late fees, or insufficient funds fees related to the transition.

The CFPB has also discussed with Bilt the steps it has taken to guarantee that all transition-related technical issues have been resolved, and Bilt’s documentation submitted to the CFPB appears to show that it has completed the process and its systems are back on track.

The CFPB statement further noted that “Bilt is in the process of reviewing requests for reimbursement and, by June 4, will reimburse fees for more than 500 newly identified customers from its outreach following discussions with the CFPB.”

The CFPB’s public statement is notable — and unusual — for a number of reasons, not the least of which is that the bureau has become a shell of its former self under acting Director Russ Vought.

The only public enforcement action the CFPB has taken under the current administration has been the pro forma case against bankrupt middleware provider Synapse. Indeed, the CFPB has watered down and rolled backed numerous enforcement actions, terminated consent orders, and closed ongoing investigations.

It’s also worth noting that the CFPB does not have supervisory jurisdiction over Bilt, though that wouldn’t preclude the bureau from bringing an action using its UDAPP authority.

Multiple industry experts, including former CFPB staffers, told Fintech Business Weekly that it wasn’t necessarily unusual that the CFPB would meet with a company regarding alleged consumer harm — particularly one as large and high-profile as Bilt, which has generated significant media attention.

But, industry experts stressed, issuing a press release about such a meeting is largely unprecedented.

Taking the CFPB’s statement at face value, it should interpreted mostly as a positive: the bureau, like Senator Warren, appears to be working to ensure that Bilt makes things right with consumers who were negatively impacted by issues the company experienced in its transition.

For its part, a Bilt spokesperson reiterated the company’s focus on its users, sharing the following statement with Fintech Business Weekly:

Our members have been our priority since day one. While the transition to the Bilt Card 2.0 in February represents an even more exciting future that offers our membership richer rewards and greater flexibility, the transition also attracted unexpectedly high demand, and some of our members experienced gaps in service that are simply unacceptable to us.

In response, we increased our customer service capabilities to address this and proactively communicated with any impacted members. All outstanding issues relating to the card transition in February have been addressed and resolved.

Should any member ever have an issue we encourage them to contact Bilt, as we will do everything we can to make it right.

Bolt’s Breslow Made Headlines For “Firing HR.” Now He Claims Bolt “Has Achieved Profitability,” Despite Unpaid Bills.

Ryan Breslow, the volatile cofounder and once-and-again CEO of one-click checkout / “super app” Bolt, made headlines last month when he announced at a workforce innovation summit that he had “let go” the company’s entire HR team for “creating problems that didn’t exist.”

Breslow added that Bolt replaced the HR function with “a couple of person people ops team” that he described as better suited to the company’s return to functioning more like a “gritty” startup.

But now-former Bolt staffers pushed back on Breslow’s characterization that he “let go” of those working in HR.

The company’s former Senior Vice President of Legal and People Olta Andoni wrote in a public post, “Since Bolt’s CEO chose to disparage me publicly, I feel compelled to set the record straight. As the former SVP of Legal and People at Bolt, I made the decision to resign after one month with the company. My resignation was also publicly reflected on my LinkedIn profile. Additionally, former Head of HR… left the company five days after I joined to pursue another better opportunity.”

And Bolt’s former revenue accounting manager Paul van der Stam also commented publicly on Breslow’s claims, writing, “One correction to the public record: the HR and People Ops team were not fired. Each person left on their own volition. Ryan’s characterization is not only inaccurate, it is disparaging to people who made an integrity-based choice.”

During Breslow’s interview at the HR conference, Fortune’s Kristin Stoller asked Breslow about what Stoller described as “rumors” that some of Bolt’s independent contractors hadn’t been paid since January 2026 and that employees were offered equity in lieu of salary — information originally reported by Fintech Business Weekly that Bolt representatives had the opportunity to comment on or dispute prior to publication.

Breslow responded to the question about the “rumors” of non-payment and offering Bolt equity in lieu of staffers’ normal paychecks by saying, “We’ve had to make a lot of tough decisions once again as a startup that have resulted in some of those rumors spreading. Those specific ones that you’ve listed, no, that’s not the case.”

Asked to clarify the situation, a Bolt spokesperson commented to Fintech Business Weekly last Tuesday, writing, “Everyone who is doing their work has gotten or is getting paid” — seemingly confirming that there are Bolt contractors the company has not paid.

Breslow also denied that staffers were offered equity instead of their normal pay, despite supporting evidence shared with Fintech Business Weekly that seemingly contradicts Breslow’s statement:

Perhaps more shocking than Breslow’s HR comments is his claim that, “for the first time since inception, Bolt has achieved profitability.”

Breslow made the assertion in a lengthy social media post last week, where he wrote in part:

Last month, Bolt’s gross profits hit an all-time high while OPEX reached a record low.

Bolt has been doubling down on decisions that emphasize long-term profitability and market share capture. We have been investing heavily in our checkout, payments, and 1-click platform, which allow us to compete with $100b+ incumbents and win deals on a consistent basis.

We are winning deals on cost, conversion, and customer support.

We’ve also launched over 20 new product lines that have expanded our portfolio of fee capture, increased stickiness with customers, and improved customer satisfaction.

We have not been afraid to make the hard strategic decisions on reorganizing our teams. For instance, we have eliminated our Account Management and Implementation Management teams entirely. Now, sales reps manage customer relationships from beginning to end, and their only counterparts are highly technical engineers. No other non-technical middlemen. Our customers say the attention they’ve received is 10x what it has been historically, and the team has never felt more empowered and motivated.

These tough decisions have allowed us to cut OPEX considerably while driving record levels of revenue. Our integrations queue is currently filled to the brim.

Startup founders and CEOs have a way of bending the definition of “profitability” (we all remember community-adjusted EBITDA, right?), but a source close to Bolt that is familiar with the company’s financials claims that Breslow is referring to GAAP profitability.

Fintech Business Weekly could not independently verify the source’s claim, but it is somewhat difficult to reconcile with other newly obtained information and internal company communications.

As of late April, the company had failed to pay a $40,467 invoice from subscription billing platform Chargebee, which was due on January 6, 2026. Bolt was eventually locked out of the ability to login or manage its Chargebee services due to non-payment, according to internal documents shared with Fintech Business Weekly.

Bolt has also failed to file corporate income tax returns in Canada for 2020, 2021, and 2022, according to internal communications reviewed by Fintech Business Weekly. Bolt staffers estimated the company’s unpaid tax liability at approximately CAD $500,000 (about USD $360,000).

Fintech Business Weekly asked the Bolt spokesperson about the Chargebee and Canadian tax issues, but did not receive a response as of the time of publication.

Everyone Wants To Issue Their Own Stablecoin. But Is It Sustainable?

Stablecoin-related announcements seem to be reaching an absolute fever pitch lately. In just the past week or so, we’ve seen:

• Cash App rolled out support for USDC to its nearly 60 million users

• SoFi announced (for what feels like the umpteenth time) that its 15 million members can now buy, sell, hold, and convert its SoFiUSD stablecoin

• Reports circulated that Stripe, Visa, Mastercard, and, potentially, Coinbase may team up on issuing a new stablecoin

• MoneyGram announced its MGUSD stablecoin

• Deel announced its DLUSD stablecoin

• Big-bank payments consortium The Clearing House is developing a tokenized deposit network

• And the Conference of State Bank Supervisors published a comment letter on the Treasury’s proposed principles for assessing state-level regulatory regimes

Cash App began rolling out its USDC stablecoin feature to users toward the end of May. All users should now have access to these capabilities.

The move is notable because Cash App parent company Block and its cofounder and CEO Jack Dorsey have, historically, been more narrowly focused on bitcoin, when it comes to crypto.

Cash App’s USDC support is relatively narrowly limited to operating as a pay in/pay out rail.

Cash App users can deposit USDC into their Cash App accounts via the Solana, Ethereum, Polygon, and Arbitrum blockchains — but these funds are immediately converted to fiat US dollars, not held within Cash App as stablecoins. Conversely, users can withdraw fiat funds from their Cash App wallets as USDC into wallets on the aforementioned blockchains.

SoFi’s approach is a notable contrast to Cash App. SoFi has chosen to create its own stablecoin, SoFiUSD, which, the bank says, is redeemable 1:1 for fiat US dollars and is fully backed by “liquid assets.” SoFiUSD operates on Ethereum and Solana.

SoFi says that in the “coming weeks” users will be able to convert SoFiUSD into tokenized deposits, “allowing members to earn interest and access FDIC insurance on the deposits.” SoFi also intends to offer “global mobility” on the blockchain, which, the bank says, will “allow[] SoFi members to move value across borders 24/7/365, with fewer delays and lower costs than typical legacy financial systems.”

SoFi plans to launch SoFiUSD on crypto exchange Bullish, thereby making it available to institutional clients and supporting stable pricing and efficient execution for high-volume trades.

It’s not clear why a typical SoFi retail accountholder would need or want to hold SoFiUSD (and/or the bank’s planned tokenized deposit product.)

Industry analysts Ron Shevlin and Alex Johnson offer two plausible theories.

In his Fintech Snark Tank newsletter, Shevlin argues that the retail rollout of SoFiUSD is something of a test run and that, to understand SoFi’s strategy, one needs to view SoFiUSD in the context of the company’s other infrastructure assets, namely, card issuer-processor Galileo.

Ron writes that “SoFiUSD will enable SoFi to serve as a stablecoin infrastructure provider for banks, fintechs, and enterprise platforms,” and argues that “SoFi Bank will use SoFiUSD to settle its own credit and debit transactions through Mastercard, while Galileo will provide fintechs with stablecoin settlement options via the card network.”

Alex, in his Fintech Takes newsletter, has a somewhat more cynical point of view (which I don’t disagree with!):

Put bluntly, there is no new, tangible benefit that SoFi members are going to get from SoFiUSD, based on what the company shared in its press release.

This makes me think that the real purpose of this press release is to appeal to SoFi investors, particularly the rabid contingent of retail traders that have made $SOFI a part of their identity.

And the fact that a savvy CEO like Anthony Noto apparently believes that this press release will positively impact those investors’ sentiment towards SoFi makes me depressed about the stock market, stablecoins, and the state of fintech overall.

Whatever happened to customer value, man?

In what could be interpreted as a sign of card-world incumbents seeking to blunt the threat posed by stablecoins to their business models, news circulated last week that Visa, Mastercard, Stripe, and possibly Coinbase are planning to team up to form a new consortium that would issue its own stablecoin.

The reports were light on details, but are notable nonetheless given the names involved. Stripe already has a significant presence in the stablecoin space, both through its stablecoin infrastructure subsidiary, Bridge, and through growing efforts to integrate stablecoins into its core payment processing business. Mastercard has its own stablecoin infrastructure play, Bridge-competitor BVNK, which Mastercard announced it would acquire earlier this year.

And, while Visa hasn’t made a high-profile acquisition á la Bridge or BVNK, it is very active in the stablecoin space, including an investment in BVNK and partnerships with Bridge, crypto card issuer Rain, crypto-as-a-service platform Baanx, as well as Visa’s own tokenization and stablecoin platforms.

The potential involvement of Coinbase is also notable, given Coinbase’s existing relationship with USDC-issuer Circle. More than a quarter of USDC in circulation is held on Coinbase, and Coinbase and Circle have a revenue sharing agreement that earned Coinbase approximately $1.35 billion in 2025.

Incumbent financial institutions aren’t taking the competitive threats posed by stablecoins lying down. Last week, the Wall Street Journal reported that the U.S. largest banks are working on creating a blockchain-based tokenized deposit network.

The Clearing House, a payments consortium co-owned by some of the country’s largest banks, will lead development and operations of the nascent effort, with a target launch date in “the first half of 2027,” according to the Wall Street Journal.

Tokenized deposits seem likely to serve a similar set of use cases as stablecoins, but, because they’re legally structured as deposits, are treated the same as commercial bank deposits for regulatory and accounting purposes. As bank deposits, customers also enjoy standard FDIC insurance coverage, unlike stablecoins, which lack such protections.

Last week also saw legacy remittance service MoneyGram and startup payroll and HR platform Deel launch their own stablecoin and wallet solutions.

MoneyGram describes its MGUSD as intended for users who need to move money, but may lack access to traditional financial services.

Beyond the primary use case of sending funds, MoneyGram also emphasized the potential for MGUSD to allow users to protect their purchasing power from unstable local currencies, saying in its announcement, “In many markets, consumers face inflation, currency instability or limited access to reliable financial services. MGUSD gives those customers a stable, dollar-denominated balance they can hold and access 24/7, as well as move globally and convert into local currency when they need it, on their own terms, at any time, from anywhere.”

While targeting a different segment of consumers, Deel’s announcement echoed MoneyGram’s narrative about enabling users in developing market economies to protect purchasing power by avoiding fees, punitive exchange rates, and inflation.

Deel’s DLUSD stablecoin and wallet allow contractors who are paid via Deel to choose to get paid, hold funds, earn “rewards,” and spend directly from a Deel stablecoin wallet.

Deel is beginning by rolling out the offering in Latin America, starting in inflation-plagued Argentina. The company plans to expand the offering to APAC, MENA, and Africa.

Finally, the Conference of State Bank Supervisors, a trade group that represents state financial regulators, published a comment letter last week encouraging the U.S. Treasury to “recalibrate” principles on the state licensing of stablecoin issuers under the GENIUS Act.

The GENIUS Act lays out a variety of pathways to being licensed as a “permitted payment stablecoin issuer,” including state licensing regimes. An individual state’s legal and regulatory framework, though, must be “substantially similar” to the federal framework.

The Stablecoin Certification Review Committee, a body called for by GENIUS that includes the Treasury Secretary, the Chair of the Federal Reserve (or the Vice Chair for Supervision), and the Chair of the FDIC, must approve each state’s regime as meeting or exceeding the requirements laid out in part 4(a) of the GENIUS Act.

Part 4(a) describes the requirements for permissible reserves, redemptions, reserve disclosures, the prohibition on rehypothecating reserves, capital, liquidity, and risk management, BSA/AML programs, and related topics.

CSBS’ comment letter argues that the Treasury Department’s proposed principles for determining when a state-level regulatory regime is substantially similar to the federal framework “improperly privilege the Office of the Comptroller of the Currency’s (“OCC”) stablecoin framework over the judgment and discretion of the states” in several critical areas.

CSBS argues that, “[i]f finalized in their current form, the proposed principles would swing stablecoin regulation in the United States toward a one-size-fits-all federal framework, threatening innovation in emerging stablecoin markets.”

Crime & Regulatory Round Up: Aspiration Cofounder Gets 14 Year Prison Sentence, GreenSky Settles State Suits for $10m, Wise Faces AML Scrutiny in Europe [Paying Subscriber Exclusive]

In fintech crime news, cofounder of “green” neobank Aspiration Joseph Sanberg was sentenced to 14 years in prison last week for his participation in a 5-year scheme to defraud lenders and investors of at least $248 million.

Read more

Hey all, Jason here.

Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

This episode is brought to you by Limited. Limited gives your business bank accounts in the US, Europe, Latin America, Africa, and MENA from one platform.

Issue expense cards, manage team spending, and pay out to vendors and contractors through 300+ local payment rails in 80+ currencies, not just SWIFT. That means faster settlement, lower fees, and no more waiting days for a cross-border wire to land. Your funds are held in your own custody, never pooled, never exposed to someone else’s risk.

In this episode, Alex and I had the chance to discuss:

• Why seemingly every fintech, crypto, and stablecoin company wants to become a bank (and what it could mean for their valuations)

• A return to BaaS Island: CFSB’s consent order, and how it compares to those of other fintech partner banks

• President Trump’s fintech- and banking-related executive orders

• And, as always, what Alex and I just can’t let go of

It’s that time of year: Money20/20 (Europe) — which makes my life easier, as it’s in Amsterdam. I’ll likely only be on site one of the three days, so, if you see me, please feel free to flag me down to say hi.

Speaking of Europe, two upcoming events that may be of interest to folks that live or do business here:

• A Unit21-hosted webinar on June 10th, featuring speakers from MoonPay and BVNK, on the topic “You have your MiCA license. Now what?” — more info and register here.

• Also, I’ll be speaking as part of an upcoming RiskTech Connect panel in Amsterdam hosted by SEON, digging into what’s actually happening in fraud and risk right now, what’s working, what isn’t, and where AI is genuinely helping (vs. adding complexity). Full details and registration info here.

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ICBA Asks OCC To Rescind Coinbase’s Conditional Charter Approval

Earlier this month, the Independent Community Bankers of America (ICBA) sent Comptroller Gould a letter encouraging the Office of the Comptroller of the Currency to rescind Coinbase’s conditional approval to charter a national trust bank.

The move from the trade association, which represents smaller U.S. banks, is one piece of the wider wrangling between “tradfi” (traditional finance) and crypto/stablecoin world.

The stakes — and the rhetoric — appear to be escalating alongside recent developments that could reasonably be described as “wins” for the crypto industry: passage of the GENIUS Act, which created a legal and regulatory framework for stablecoins in the U.S., progress on the crypto market structure bill known as the CLARITY Act, which moved out of the Senate Banking Committee but still faces an uncertain future before the full Senate, and a hodgepodge of developments related to Federal Reserve master accounts.

At the risk of oversimplifying, crypto world is essentially arguing that incumbent banks are working to protect their regulatory moat in order to block competition.

For their part, bank world is basically arguing crypto/stablecoins are pursuing a regulatory arbitrage strategy, in which they functionally engage in the business of banking, but without the requirements and oversight that govern traditional banks. This, bank world argues, poses safety and soundness, financial crime, and consumer protection risks.

The ICBA and the Bank Policy Institute, which represents the country’s largest banks, have filed comment letters opposing many of the national trust bank charter applications filed by crypto- and stablecoin-related firms. The National Community Reinvestment Coalition and Fair Finance Watch, both of which are consumer advocacy groups, also weighed in on a number of the national trust bank applications.

The ICBA’s latest volley against Coinbase’s charter, specifically, asks the OCC to rescind or suspend Coinbase’s conditionally approved trust bank charter. Coinbase received conditional approval of its application on April 2, 2026.

ICBA points to New York Attorney General Letitia James’ suit against Coinbase in the state for what the New York complaint describes as an illegal gambling operation, with the ICBA writing, “[W]e believe that the April 21, 2026 allegations by the New York State Attorney General of violations of state and federal law by a wholly-owned subsidiary of Coinbase Global, merit either the recission of the approval or the suspension of the preliminary approval until the allegations are resolved and the OCC has reevaluated the propriety of granting Coinbase Global a bank charter.”

The subsidiary the ICBA’s letter is referring to is Coinbase Financial Markets, Inc., which the New York Attorney General says “offer[s] users the ability to bet on events, including sports, entertainment, and elections, in violation of New York laws” via so-called prediction markets. This constitutes “illegal, unlicensed gambling operations,” the complaint alleges.

ICBA’s letter points out that the OCC typically would delay or deny an application when a criminal allegation is made against an applicant or a subsidiary, or that, if an application is not withdrawn or denied, that the OCC would normally “impose an enhanced compliance regime to ensure that the bank is not used for unlawful purposes.”

The OCC manual requires it to examine the background of applicants for any information that raises concerns about competence, character, or integrity; Coinbase’s “use of a wholly-owned subsidiary to engage in illegal activities raises the same concerns regarding the integrity, competence and experience of the applicant as if the illegal conduct was conducted directly by the applicant,” the ICBA argues.

ICBA’s letter attaches its original opposition to Coinbase’s national trust bank charter application and reiterates a number of enforcement actions Coinbase has faced in the past:

• A January 2023, consent order from the New York State Department of Financial Services for “wide-ranging and long-standing” BSA/AML compliance failures.

• A July 2025, consent order from the Connecticut Department of Banking against Coinbase Custody Trust Company, LLC for unlicensed money transmission.

• A £3.5 million penalty from the UK Financial Conduct Authority in 2024 for AML failures

• A $6.5 million order from the Commodity Futures Trading Commission in 2021 for false reporting and wash trading.

In addition to the regulatory actions against Coinbase, ICBA’s original comment letter in opposition to the company’s charter application, sent to the OCC last November, flags a number of other concerns, including that the proposed entity, Coinbase National Trust Company:

• intends to rely on what ICBA describes as Coinbase’s “demonstrably flawed risk and control functions” and “a governance structure that prevents independent oversight”;

• would have a narrow concentration in specific types of digital asset custody, posing a challenge for the trust bank to achieve and maintain profitability during crypto bear markets;

• would be a challenge for the OCC to resolve should it fail, given that the OCC’s receivership framework for uninsured institutions of CNTC’s scale is untested.

Bank lobbyists and consumer advocates aren’t the only ones with concerns about Coinbase’s and other firms trust charter applications.

Senator Elizabeth Warren (D-MA), the ranking Democrat on the Senate Banking Committee, has also expressed skepticism of crypto and stablecoin firms, generally, and their efforts to further wade into the traditional financial system by seeking trust bank charters, specifically.

In a letter earlier this month to Comptroller Gould, Warren describes the OCC’s conditional approvals as apparent violations of the National Bank Act. Warren argues that the entities seeking charters, including Coinbase, “look like crypto banks, not trust companies.”

Per Warren’s letter (spacing adjusted and emphasis added):

National trust companies do not face the same restrictions, oversight, and obligations as full-service national banks, and therefore are not permitted to engage in the broader set of activities that constitute the business of banking, like issuing deposits and making loans.

Nonetheless, since December 2025, you have approved at least nine national trust charters for crypto companies that intend to engage in activities that appear to go far beyond the narrow set of activities permitted by law. These companies are effectively crypto banks that want to evade the fundamental safeguards and obligations that come with being a bank.

Your decision to facilitate this regulatory arbitrage not only conflicts with federal law, it also poses serious risks to consumers, the safety and soundness of the banking system, and the separation of banking and commerce.

Warren points to Coinbase’s charter application, which specifies that it intends to “enable Custody clients to access staking, financing, and trading services,” and will “explore the launch of other digital asset products, including payments products.”

“Staking” in crypto is functionally somewhat similar to bank deposit products, and Coinbase and others have explicitly discussed using national trust banks as part of a broader product strategy that includes payments and credit.

In her letter, Warren asks the OCC to produce a number of documents:

• The full national trust bank applications, including confidential (non-public) exhibits of Ripple National Trust Bank; Paxos Trust Company, LLC; First National Digital Currency Bank; Fidelity Digital Asset Services; BitGo Trust Company; Foris DAX National Trust Bank; National Digital Trust Company; Bridge National Trust Bank; and Coinbase National Trust Company.

• A list of activities each trust banks plan to engage in, the OCC’s analysis of which of those it deems activities of a trust company or “related” to activities of a trust company, and supporting legal analysis.

• The OCC’s opinion if, under Interpretive Letter 1176, a national trust bank could engage in an activity otherwise unlawful under the National Bank Act as long as a state nominally labeled the activity as “fiduciary” in nature.

• If the OCC’s final rule related to chartering national trust companies would allow such companies to engage in non-fiduciary activities reserved by law for full-service national banks without the corresponding oversight and legal obligations.

• The OCC’s understanding of if GENIUS Act amended 12 U.S.C. 27(a), 92a, or any other section of the National Bank Act governing national trust companies.

• And copies of any communication between OCC officials and President Trump, immediate members of Trump’s family, employees or others operating on behalf of Trump or his immediate family members, or any White House employees related to the trust charter applications associated with the companies mentioned above.

Various stakeholders in the crypto and stablecoin ecosystem were quick to push back on Warren’s arguments.

The Digital Chamber, which describes itself as the world’s largest digital asset and blockchain trade association with more than 250 members, sent a letter to Comptroller Gould last week regarding national trust bank charters.

The trade group’s letter argues:

The record does not support the suggestion that these approvals were made carelessly or unlawfully. Each of the companies named in Senator Warren’s letter underwent a rigorous OCC review process, met all applicable statutory and regulatory requirements, and were granted charters or conditional approval for charters only upon demonstrating that their proposed activities fall within permissible activities for national trust banks. The process included extensive scrutiny of consumer protection frameworks, compliance programs, information security systems and architecture, and risk management infrastructure, which are obligations these banking associations are now bound to maintain under ongoing OCC supervision.

The Digital Chamber further argues that Warren’s suggestion that approvals of these trust bank charters is an apparent violation of the National Bank Act “misreads both the statute and the OCC’s longstanding charter authority.”

At this point, the horse has already left the barn, so to speak, and it is a near certainty that the OCC under Comptroller Gould will not revoke or suspend conditional national trust bank charters granted to Coinbase or any other applicant.

Still, questions — and, presumably, battles — remain ahead: what activities will these new trust banks try to and be permitted to engage in? Will they be granted access to Fed master accounts?

With the CLARITY Act not yet finalized, banking industry opposition feels like it is reaching a crescendo. And, true to the idiom that “politics makes strange bedfellows,” Senator Warren, long a thorn in the side of bankers, and bank lobbyists like ICBA and BPI, are more or less on the same side of this issue, pushing back on the crypto and stablecoin industry’s growing inroads into the traditional financial system.

How, exactly, these forces play out in the short-, medium-, and long-term remains to be seen and seem likely to be highly dependent on the outcome of the midterm elections — and who controls the White House in 2029.

Q1 Quarterly Banking Profile: Seven Quick Takeaways

The FDIC released its Quarterly Banking Profile for the first quarter last Wednesday. The report is a data rich snapshot of the overall health of the U.S. banking system.

Aggregate earnings increased by $2.8 billion quarter over quarter, hitting $80.5 billion, for a 1.26% return on assets. ROA increased by 2 basis points quarter over quarter.

The improvement in net income was driven by increases in noninterest income, realized gains on securities, and a decrease in applicable income taxes, which were partially offset by higher noninterest expenses, higher provisions, and lower net interest income.

Net interest margin, or the difference between interest generated from loans and assets vs. cost of funds decreased, by 8 basis points quarter over quarter to 3.31%.

Credit loss provisions rose slightly, to $21.4 billion, but were still 4.6% lower compared to Q1 2025.

Credit performance is still holding, with overall rates of past-due/non-accrual and net charge-off rates down slightly vs. last quarter. Past-due/non-accrual rate came in at 1.53% in the first quarter, with a net charge-off rate of 0.59%.

Unrealized losses on invest securities ticked up by $19 billion, or 6.2%, to $325.1 billion, owing to the rise in the 30-year mortgage rate in March, which decreased the value of banks’ existing portfolios of mortgage-backed securities.

Finally, banks reported an increase in domestic deposits of $389.7 billion, or 2.1%, as well as an increase in non-deposit funding liabilities, primarily composed of repurcahse agreements and trading liabilities, of $393.3 billion.

Paid Subscriber Exclusive: CFPB & Treasury Undermine CDFI Program, Tennessee Gov. Signs Remittance Tax, Coinbase Re-Launches Direct Deposits

Having failed at earlier efforts to gut the Treasury Department’s Community Development Financial Institution program, which has broad bipartisan support, the Trump administration is trying several new approaches.

Last month, Treasury announced it was opening an investigation into allegedly “predatory” practices by CDFIs, and now, Bloomberg Law’s Evan Weinberger reports, the CFPB has sent out at least four “supervisory questionnaires” to loan funds that are part of the CDFI program.

Read more

Hey all, Jason here.

In this episode, I had the chance to chat with Edward Woodford, the founder and CEO of crypto, stablecoin, and tokenization infrastructure platform zerohash. Edward and I had the chance to talk about:

• Why zerohash is applying for a national trust bank charter

• How the CLARITY Act (crypto market structure legislation) may impact the U.S. crypto industry

• What Edward is hearing from non-financial industry execs about crypto, stablecoins, tokenization, and blockchain

• Thinking about crypto as an “asset class” vs. crypto as “software”

• The potential synergies between crypto/stablecoins and AI agents

• What keeps Edward up at night and what he’s most excited about

• And much more!

If you need another good newsletter read for your long weekend (it’s also a public holiday in the Netherlands on Monday), I recommend giving this newsletter from my industry colleague and friend Alex Johnson a read. The 2020s aren’t the 1970s, but there are structural and, yes, ~vibe~ similarities.

If you rather listen to something, I have two podcasts for you: an episode of Breaking Banks appropriately titled “Is just a little crime OK now or what?,” and, if you missed it, my conversation with merchant connectivity platform Knot’s cofounder and CEO Rory O’Reilly.

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CFSB Hit With BSA/AML Enforcement Action

Community Federal Savings Bank, more commonly known simply as CFSB, is a single-branch bank located underneath the elevated train tracks and across from a beauty salon and a liquor store in the Woodhaven neighborhood of Queens, New York.

Despite that small footprint, CFSB has grown rapidly in recent years: from less than $140 million in assets, at the end of 2017, to nearly $900 million in assets, as of the end of 2024 — though the bank’s assets actually shrunk slightly in 2025.

CFSB’s growing assets helped lift the bank from a $2.5 million loss in 2017 to a $21.1 million profit in 2024, before dropping to a $10.9 million profit in 2025.

The key to CFSB’s rapid growth? Fintech partnerships.

In addition to a relationship with middleware platform Synctera, CFSB programs over the years have included a significant number of multi-currency/cross-border and international programs:

• Airwallex, an Australian fintech that offers business multi-currency accounts and international payments

• ChipperCash, an African remittance and payment startup for both consumers and businesses

• CurrencyWave, which offers multi-currency accounts and international payments to consumer and businesses

• LemFi, a UK-based fintech offering multi-currency accounts and international payments to consumers

• Payoneer, an international payment processing platform for businesses and freelancers

• Truly, which offers multi-currency “global” business accounts and international payments

• WireBarley, an international remittance service for consumers and businesses

• Wise, which offers multi-currency accounts and cross-border payments to consumers and businesses

• Yorbis, a multi-currency and cross-border service for businesses

• Nomad, which offers US consumer bank accounts, remittances, and investing to users in Brazil

• Zolve, which offers US consumer bank accounts, credit cards, and related products, primarily targeting foreign students in India who plan to attend school in the US

CFSB has also worked with a number of crypto/digital asset programs, including Crypto.com.

This newsletter flagged the growing risks in CFSB’s programs in September 2024, noting at the time that:

At least three of these firms have run into legal issues. For example, Airwallex and Wise have been linked to a $5 million crypto “pig butchering” scheme, first reported by Fintech Business Weekly.

Wise’s relationship with another of its bank partners, troubled Evolve Bank & Trust, abruptly ended last October, after Wise allegedly facilitated transfers to Hamas-linked entities in Gaza.

And Payoneer, licensed as a money transmitter in the US, reached a settlement with the New York Department of Financial Services last November over sanctions violations.

Per that settlement, Payoneer facilitated 2,220 commercial transactions from 2013 through 2018 to entities in sanctioned jurisdictions like Iran, Crimea, Sudan, and Syria, as well as to individuals on the Specially Designated Nationals (SDN) list.

What’s In CFSB’s Enforcement Action?

CFSB entered into a formal agreement with its primary federal regulator, the Office of the Comptroller of the Currency, in 2014. The agreement stemmed from issues with the bank’s board and management oversight, strategic planning, earnings performance, and, yes, BSA/AML-related problems.

The 2014 agreement was terminated in 2020, but was functionally replaced with a more narrowly tailored agreement that no longer included BSA/AML in its scope. The 2022 agreement was terminated approximately two years later, in January 2022.

The agreements required the bank to develop a business and profit plan, ensure that the bank had “competent management in place,” including its BSA Officer, revise and adhere to a Suspicious Activity Report (SAR) program that meets legal and regulatory requirements, and develop and implement policies to comply with OFAC requirements.

When Fintech Business Weekly reached out to CFSB in mid-2024, a bank spokesperson said at the time that the bank was “not currently under an enforcement action, nor do we have knowledge of any pending regulatory enforcement action.”

But, last week, the OCC publicly released a consent order CFSB entered into this April. The enforcement action is notable in an environment where the OCC has been far more active in terminating existing consent orders vs. entering into new ones.

The enforcement action focuses narrowly on BSA/AML-related issues, and contains the unusual clarification that the regulatory action is “based on concerns largely unrelated to customers involved in digital assets activities.”

The order notes that CFSB “has significantly grown its payment processing line, relative to its size, resulting in significant annual wire and ACH activity, including cross-border activity involving foreign financial institutions” — reinforcing that asset size alone is a poor heuristic for capturing some of the risks posed by BaaS business models that facilitate high transaction volumes.

Per the order, CFSB “failed to develop and maintain controls and risk management processes commensurate with its risk and growth” and has suspicious activity monitoring processes that are inadequate to identify, investigate, and report potentially suspicious activity.

CFSB’s automated transaction monitoring system, the order says, had “deficiencies” in its data, logic, and methodology, which “resulted in the system auto-closing alerts that should have been escalated for further review.”

The result was that a “very high percentage” of transaction monitoring alerts were automatically closed without investigation.

The order further describes CFSB’s customer due diligence program as “ineffective,” resulting in CFSB being blind to “the nature of certain of its customers’ businesses and the purpose of the transactions in the payment processing line, including risks related to foreign financial institutions.” CFSB “failed to effectively consider risks related to payment processing line customers, including the volume of cross-border transactions,” the order says.

Stunningly, CFSB also “failed to determine whether it had correspondent accounts for foreign financial institutions.” A correspondent account is an account that one bank holds at another, CFSB in this case, that can be used to execute international wire transfers, clear foreign currency transactions, and to access national payment systems.

Because correspondent accounts present higher financial crime risk, banks must be aware if an account is owned by a foreign financial institution. A bank holding a correspondent account for a foreign financial institution should be aware of the jurisdiction, ownership, and nature of the foreign institution’s business.

The order also found CFSB to have weak independent testing of its BSA/AML program.

The upshot is that CFSB’s BSA/AML program has significant deficiencies that include, according to the consent order, “(i) systemic internal controls breakdowns, (ii) weak independent testing, and (iii) weak BSA staffing.”

CFSB’s agreement with the OCC is also notable for what isn’t in it: anything else.

During the wave of enforcement actions against BaaS banks from 2022-2025, which saw around 20 orders from the OCC, the FDIC, and the Fed, BSA/AML issues were one of the most common topics, but board governance and third-party risk management were commonly addressed alongside financial crimes compliance.

Many of the 2022-2025 actions also included business restrictions; for example, a requirement to obtain supervisory non-objection before onboarding new fintech programs. CFSB’s order does not contain any such business restriction.

What Does the Consent Order Require?

CFSB’s consent order requires the bank to stand up a compliance committee to oversee its progress under the order.

The bank must develop an action plan within 90 days and obtain supervisory non-objection to the plan.

The consent order further requires CFSB to:

• undertake a comprehensive, end-to-end review and assessment of its BSA/AML Program;

• achieve and maintain ongoing compliance with the BSA, including all recordkeeping and reporting requirements;

• assess the impact of its activities, product lines, and third-party

  relationships on its BSA/AML risk profile based on appropriate data

  and information;

• identify and evaluate the adequacy of internal controls and assess its residual BSA/AML risk profile, including whether it aligns with its board-approved BSA/AML risk appetite;

• develop a customer due diligence program that includes clear definitions of customer risk categories and an effective methodology for assigning a customer’s risk category;

• ensure ongoing monitoring is conducted to maintain and update customer information and to identify and report suspicious activity;

• ensure the timely identification of correspondent accounts for foreign

  financial institutions;

• ensure that management’s and staff’s respective responsibilities for

  establishing and revising customer risk profiles are clearly defined;

• ensure that missing or inaccurate CDD information is timely identified and remediated;

• develop, implement, and adhere to a risk-based suspicious activity identification, evaluation, and reporting program;

• conduct a suspicious activity lookback review;

• implement an independent BSA/AML testing program;

• develop, implement, and maintain an acceptable system of internal controls to identify and control the risks associated with money laundering, terrorist financing, and other illicit financial activity;

• employ sufficient staff with appropriate training, skills and expertise needed to support the BSA Officer and the BSA/AML Program.

Eight Notable Stats from the Fed SHED Report

The Federal Reserve recently released the results from its 2025 Survey of Household Economics and Decisionmaking (this is the report that the famous “x% of households couldn’t afford a $400 emergency expense” stat comes from.)

The survey was fielded from October 17, 2025, through October 28, 2025, with 13,099 participants completing the questionnaire.

It is worth reinforcing that this is survey data. While the Fed, no doubt, has a statistically sound methodological approach, there are a host of gaps and challenges in interpreting survey data, including that what respondents say — stated preference — does not always align with how respondents actually behave — revealed preference.

For those who are curious, the full survey instrument showing questions and answer choices is available in the survey’s appendix.

With that, here are eight(ish) stats from the 2025 SHED report I found notable.

1. Self-Reported Financial Well-Being Broadly Stable (as of October 2025)

Given the ongoing military conflict in Iran, elevated energy prices, and the prospect of resurgent inflation, it is worth reinforcing that the survey was fielded in October 2025.

As of that time, respondents self-assessed financial condition was remarkably stable, with 73% indicating they were “doing okay” or “living comfortably” — more or less the exact same proportion as in the prior three years (top line in the graph above).

Notably, while respondents perception of their own economic situation was generally positive, their perceptions of their local and the national economy were markedly worse. Only 45% thought their local economy was “good” or “excellent,” and a mere 26% said the same about the national economy.

2. Price Increases Are Top Financial Challenge or Concern

In September 2025, the month prior to the survey being conducted, the consumer price index reflected a 3% increase year over year — firmly above the Fed’s long-range 2% target, but a far cry from the 9.1% rate inflation peaked at in June 2022.

But with stubbornly high housing prices and an increasingly stagnant job market buttressed by fears that AI will replace white collar workers, “affordability” has remained top of mind.

Fifty-three percent of respondents cited price increases as an area of “major concern,” slightly down vs. 2024, with 38% saying prices are an area of “minor concern,” up 3% points vs. 2024.

3. How Americans Are Adapting to Higher Prices

The survey asked Americans how they’re responding to higher prices. The most common tactics include switching to cheaper products (62% of respondents), using less or ceasing to use certain products (60%), and delaying major purchases (46%).

Respondents also indicated they’re coping by reducing how much they’re saving (41% of respondents) and, more worryingly, by increasing borrowing (16%).

4. Thirty-Seven Percent Couldn’t Afford a $400 Emergency (sort of)

Seemingly the most cited statistic in fintech, the stat has remained unchanged since 2022.

It is worth noting that the exact question posed to respondents is: “Suppose that you have an emergency expense that costs $400. Based on your current financial situation, how would you pay for this expense?”

The SHED report clarifies that “[s]ome of those who would not have paid an unexpected $400 expense completely with cash or its equivalent likely still had access to $400 in cash. Instead of using that cash to pay for the expense, they may have chosen to preserve their cash as a buffer for other expenses.”

5. Vehicle and Home Repairs Most Common Unexpected Expenses

Just shy of six in 10 respondents (59%) reported having a major unexpected expense in the 12 months prior to the survey. The most common being a major vehicle repair or replacement (30% of respondents) and a major house or appliance repair (22%). House/appliance and vehicle repairs skew more expensive vs. other categories of unexpected expenses, like a phone or computer repair or an increase in childcare or dependent care expenses.

6. Share of Unbanked Households Flat at 6%

The share of unbanked households has functionally remained unchanged since the mid-2010s — despite the growth of digital banking services since then.

Unsurprisingly, there is a strong correlation between income and unbanked status, with 21% of households with income below $25,000 being unbanked vs. 1% for households earning $100,000 or more per year.

7. Only 10% of Americans Report Any Use of Crypto

According to the report, 10% of respondents reported any use cryptocurrency in the past year, up 2% points vs. 2024, but still lower than the peak of 12% of respondents in 2021. Of those reporting any use of cryptocurrency, the primary activity was buying crypto and/or holding it as an investment.

This is another case where it is worth paying attention to the specific question posed to respondents: “In the past year, have you done the following with cryptocurrency, such as Bitcoin or Ethereum?”

It’s not clear to what extent respondents would consider stablecoins, the most popular of which are Tether (USDT) and USDC, as “cryptocurrency” for the purposes of their answer.

Further, financial services companies are increasingly using stableoins behind the scenes and/or ‘abstracting away’ user-facing complexity, meaning Americans may actually be using “cryptocurrency” without realizing it.

8. BNPL Use, Late Payments Climb

The SHED survey has showed a steady increase in the share of respondents who report using buy now, pay later services.

Since 2021, the proportion of respondents who indicating using BNPL in the prior 12 months has increased by 6% points.

However, of those using BNPL, the share of those reporting late payments on their BNPL plans has jumped significantly, from 15% in 2021 to 26% in the 2025 data.

Paying Subscriber Exclusive: Chime CEO Teases Bank Ambitions, Trump EOs, CAMELS Refresh

During an appearance at a JPMorgan Chase investor conference, Chime CEO Chris Britt said, “It’s, to some degree, an inevitability that we’ll become a bank; the question is just, when?,” according to reporting from Banking Dive.

“Every year, we take a step back and evaluate, is now the time?” Britt added.

Read more

Hey all, Jason here.

In this episode, I had the chance to chat with merchant connectivity platform Knot’s cofounder and CEO Rory O’Reilly. Rory and I had the chance to discuss:

• Rory dropping out of Harvard to start his first company

• How Knot became the industry’s go-to solution for card switching

• Expanding from its initial card switching product to building the merchant connnectivity layer, and how Knot complements other core fintech infrastructure

• Hitting a 100 million API call per month milestone

• Knot’s international expansion to Canada and Latin America

• And much more!

You know, the idea was to stay in México until it was properly spring here in the Netherlands. I suppose it is spring, but the weather is still… not great, as evidenced by the fact I was wearing one of my winter sweaters last week.

As we get into late May, I’ve started thinking through my fall travel/conference schedule. I do plan to be at Money20/20 Europe here in Amsterdam, which takes place in early June, for at least one of the three days.

In a year where I’m trying to travel less, what are the can’t miss events I should attend or speak at this fall? Let me know by replying to this email.

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Q1 Call Reports: Checking In On Varo & Evolve

It has been a bit over a year since Varo cofounder Colin Walsh stepped down as the fledgling bank’s CEO.

Gavin Michael, former CEO of cryptocurrency exchange Bakkt, took over as CEO in February 2025. Around the time Michael took the reins, Varo raised about $50 million in additiona; funding, with the company officially announcing it had raised a $123.9 million Series G in February 2026.

Varo has made some progress: it has re-ramped marketing, resulting in the raw number of accounts growing from about 5.1 million at the end of Q1 2025 to nearly 7.7 million at the end of Q1 2026.

Usage of Varo’s small-dollar loan products also appears to have materially increased, with the total book outstanding at the end of Q1 2026 hitting $57 million, up 43% vs. the $40 million outstanding at the end of Q1 2025.

Varo continues to see high rates of charge offs. In its unsecured small-dollar loan portfolio, Varo recorded $6.3 million of charged off debt, net of recoveries, in Q1 2026, equivalent to 11% of its book. Despite its secured structure, Varo continues to see losses on its Varo Believe card, with losses, net of recoveries, equivalent to 0.40% of its card portfolio in Q1 2026.

Varo’s call report indicates it holds $220 million of deposits on balance sheet, with an optional management note (which feels like it was written personally for me!) clarifying that “[d]eposit sweep balances increased by $30 million to $180 million at period end.”

Including the $180 million of swept deposits, Varo customers hold a total of about $400 million, or an average of $52 per account. The amount of deposits swept off balance sheet is not included in banks’ quarterly call reports.

While an average of $52 per account is materially better than the $28 per account Varo’s on balance sheet deposits implies, it still indicates Varo’s customers are extremely low income, paycheck-to-paycheck households and/or that they use Varo as a non-primary account. Further, that Varo sweeps these deposits off its balance sheet reflects that it doesn’t have more profitable ways to put them to work.

Even if the deposit picture is marginally better than the call report data would suggest, Varo’s revenue hasn’t improved much.

While the raw number of accounts Varo claims to have jumped nearly 50% year over year, its revenue is only up 6% to $41 million in Q1 2026.

Varo has trimmed expenses somewhat, with non-interest expenses dropping 6% year over year to just shy of $56 million.

The upshot is that Varo saw losses jump sequentially — up more than 10% from Q4 2025 to hit $23 million in Q1 2026, though that is 7.6% less than the bank lost in Q1 2025.

Varo Bank received an equity infusion from its parent company, Varo Money Inc., of $19 million in Q1 2026. This enabled Varo to end the quarter with about $91.5 million in total bank equity, despite posting a $23 million loss for the quarter.

With its current capital levels, Varo, which uses community bank leverage ratio framework, is considered well capitalized, with a leverage ratio of 23.62%.

Evolve Losses Narrow To $430K In Q1 2026

Evolve Bank & Trust’s first quarter call report suggests it has somewhat stemmed the bleeding in the wake of its disastrous relationships with middleware providers Synapse and Solid, its data breach by a Russian hacking group, and the wide-reaching consent order it entered into with the Federal Reserve in June 2024.

Call report data is provided on a year-to-date basis for income and expenses; so, while it is possible to examine the data on a quarter-by-quarter basis, how a bank is accruing for expenses can generate odd data points, like the negative costs shown for Evolve’s legal and consulting fees in Q4 2025.

After spending a total of $25.4 million on legal and consulting in 2025, or an average of $6.35 million per quarter, Evolve’s spending on these two line items dropped to about $5.5 million in Q1 2026.

Perhaps more worrisome for Evolve is what appears to be the withering of its banking-as-a-service-linked revenue. As programs have fled in the wake of the Synapse collapse (and as interest rates have dropped), Evolve’s deposit referral and card issuance revenue has steadily marched lower.

Evolve reported just shy of $5.5 million in deposit referral and card issuance revenue in Q1 2026, compared to a combined $10.4 million in Q1 2025, a drop of nearly 50%. And, with the recent news Coastal Community Bank entered into a non-binding term sheet with Evolve and may take over some of the embattled bank’s programs, it seems likely this revenue stream will further compress.

As programs have left, Evolve has also become more reliant on uninsured deposits (40% of its on balance sheet deposit base) and brokered deposits (33% of its on balance sheet deposit base).

The upshot is that Evolve posted a loss of $431,000 in Q1 2026, slightly reducing its total bank equity capital to $161.9 million. To be clear, Evolve remains well-capitalized, with a leverage ratio of 12.7% and a common equity tier-1 capital ratio of 17.89%.

Evolve Faces New Class Action Over Russian Hack — This Time, From Impacted Financial Institutions

Nevada-based Financial Horizons Credit Union filed a new lawsuit against Evolve in late February, stemming from the hack of the bank by Russian cyberransom group LockBit.

Financial Horizon’s suit alleges that “Evolve directly enabled the theft of massive quantities of PCD and exposed financial institutions to widespread, preventable harm.”

The credit union filed the suit as a putative class action “on behalf of a class of financial institutions that suffered, and continue to suffer, harm as a direct result of Evolve’s failure to take adequate and reasonable measures to protect Plaintiffs and other financial institutions’ financial data.”

Financial Horizon’s suit notes that a portion of Evolve victims had their debit card information exposed, and that ACH files — including both payor and payee information — were also compromised in the breach.

Based on its complaint, it appears Financial Horizons became aware of the Evolve data breach via a notification distributed by Visa: “In September 2024, Visa Inc. (“Visa”) issued a Proactive Compromised Account Management System (“CAMS”) alert to Plaintiff identifying Evolve as the affected entity and stating that Primary Account Numbers (“PANs”) were at risk due to a suspected network intrusion.”

Financial Horizons alleges it (and other impacted banks and credit unions in the class) incurred significant damages as a result, “including, but not limited to: significant costs incurred from cancelling and reissuing compromised payment cards, expenses relating to increased customer service and additional fraud detection and monitoring efforts, and enduring substantial operational and reputational harm.”

The suit argues that Evolve knew or should have known of the risks of threat actors like LockBit attempting to breach its systems, yet “failed to implement and enforce reasonable security measures, including (a) strong encryption for cardholder data; (b) MFA for privileged system access; (c) continuous logging and intrusion detection; and (d) routine data-retention purges.”

Financial Horizons putative class action suit alleges negligence, negligence per se, and unjust enrichment. Financial Horizons is seeking declaratory and injunctive relief and monetary compensation, with treble damages and penalties where appropriate.

This newsletter is made possible thanks to the generous support of paying subscribers. In addition to supporting independent analysis of the banking, fintech, and crypto spaces, paying subscribers get an extended version of this newsletter and access to full archives of past issues (5+ years of newsletter goodness!)

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“Synapse Is Gonna F— Everything Up,” Yotta CEO Worried Before Brokerage Migration

Yotta, the single largest program still working with Synapse and Evolve when the banking-as-a-service provider collapsed into bankruptcy, has entered into a consent order with the California Department of Financial Protection and Innovation.

The DFPI, the state’s financial regulator, covers what is at this point well-trodden territory: Yotta represented to users their funds were FDIC-insured and “safe”, the company participated in opening Synapse Brokerage accounts for Yotta users on an opt-out basis, and, following Synapse’s collapse into bankruptcy in April 2024, Yotta end users had their funds frozen.

More than two years later, an unknown number of Yotta users are still waiting to get their money back. According to the consent order, Yotta users in California are owed a combined $28 million.

While not exactly new information, the DFPI consent order reinforces just how categorical Yotta’s claims of safety were, citing marketing materials that told users “even if Yotta goes away, your money is safe,” that “there’s no risk,” and comparing the Yotta/Synapse/Evolve partnership to household names like Chase, Bank of America, and Wells Fargo.

The consent order does reveal that Yotta executives had serious concerns about Synapse, in general, and the so-called “brokerage migration,” specifically.

The migration was part of Synapse’s plan to move away from its reliance on Evolve by opening brokerage account for existing end users at its Synapse Brokerage entity. Synapse and Yotta opened such accounts for Yotta users unless they specifically contacted Synapse to opt out.

Yotta positioned the change to its users as “just a change on the backend” that would enhance the service by giving users more protection: up to $500,000 in FDIC coverage.

The consent order includes this example of communications from Yotta to its users about the change:

“Funds held at Yotta remain held at FDIC insured banks. We are moving away from using a single bank, which was Evolve Bank & Trust in order to access a network of FDIC insured banks. In order to do this, we are opening up regulated brokerage accounts, where funds are then deposited at a member FDIC bank. This is just a change on the backend that gives us access to more competitive interest rates, higher FDIC insurance ($500K) and more.”

Yet, behind the scenes, the Yotta team was concerned about the plan; per the consent order, Yotta stated “it’s Synapse- there’s significant risk in trusting them to execute a migration[.]”

Yotta CEO Adam Moelis was even more direct, saying, “My concern is just that Synapse is gonna f— everything up []as always[.] I don’t trust Sankaet.”

The consent order also says Yotta management believed that “Synapse constantly lies… always overpromising to maintain business [a]nd then underdelivers… [i]n company killing ways.”

Ultimately, Synapse, Yotta, Evolve (and numerous other programs) went ahead with the migration in October 2023 — even though, at the time, Synapse and Evolve were already aware there was a shortfall of at least $13 million in customer funds.

The California DFPI consent order ultimately concludes that how Yotta marketed its product — the FDIC, “safety,” and “no risk” claims — constitute deceptive acts or practices, in violation of state law:

“Yotta’s advertising and marketing to consumers as set forth above, including but not limited to Yotta’s misrepresentations that any FDIC coverage of cash deposits in Yotta accounts meant the funds were “safe,” “there’s no risk”, and that consumers “can’t lose” constitute deceptive acts or practices with respect to a consumer financial product or service in violation of Financial Code section 90003(a)(1).”

In entering into the consent order, Yotta agreed to desist and refrain from engaging in deceptive acts or practices in California.

Yotta also agreed to pay a $1 million penalty, though California is allowing it to do so in installments over a two-year period. Should Yotta fail to make its payments according to the agreed upon schedule, the consent order requires it to pay the “full penalty amount” of $48 million, less any amounts already paid.

Paying Subscribers Only: Dutch Digital Bank bunq Seeks Mexican License, PayPal Settles DOJ “Fair Lending” Allegations, Community Bank’s AI “Cybersecurity Incident”

European digital bank bunq applied for a Mexican bank license. In a market dominated by LatAm-based fintechs, like Plata, Spin, and NuBank, and giant incumbents, does it have a chance?

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Happy Mother’s Day to my fintech and banking moms out there. It’s also the two-year anniversary of end users in the Synapse/Evolve debacle having their funds frozen for those who celebrate!

After ~10 weeks in Mexico (and two side trips to the U.S.), I’m finally back home in the Netherlands. Not going to lie, it’s good to not be living out of a suitcase.

I’m more or less back to regular programming and have a couple exciting and interesting stories in development that I hope to be able to publish in the coming weeks. It’s good to be back!

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Another Fintech Bankruptcy: SMB Banking & Credit Card Startup Parker Files Chapter 7

Parker, which offered banking/treasury management and credit card products targeting ecommerce-focused small businesses, abruptly shut down last Monday.

As recently as last September, the company was promoting that it had “secured over $200M in funding to help further its mission in transforming how digital businesses scale and financially operate” — though $125 million of that total was in the form of an asset-backed lending facility to scale Parker’s credit card program.

Parker did raise $58 million in equity from names that include Valar Ventures and Y Combinator. Parker partnered with Patriot Bank, N.A. on its credit card. The card offered companies “rolling terms,” in which cardholders had six or even eight weeks to pay interest-free from the date of each purchase, rather than using the typical statement cycle approach.

Parker also partnered with Piermont on its bank account/treasury management offering.

But, according to communications sent from Patriot Bank to Parker customers on Sunday, May 3rd, Parker abruptly shut down the following day, Monday, May 4th.

Patriot didn’t respond to questions about why communications about the shutdown were coming from the bank as opposed to from Parker.

According to sources familiar with the situation, Patriot essentially pulled the plug on the program after a potential acquisition of Parker that the company had been negotiating fell apart, despite Parker having some remaining runway.

A Parker cofounder described the situation as “a crazy turn of events” in a post yesterday, writing in part, “Three weeks ago, I thought Parker was going to be acquired in a deal worth nearly $90M. Yesterday, we filed for Chapter 7.”

Sources familiar with the situation told Fintech Business Weekly that AI tax compliance startup Avalara was the potential acquirer, but backed out of the deal at the last minute, leading to the abrupt shutdown and subsequent bankruptcy. Representatives for Avalara didn’t respond to questions and a request for comment.

According to Parker’s Chapter 7 petition, the company reports between $50 million and $100 million of assets and between $50 million and $100 million of liabilities, with between 100 and 200 creditors. A note on the court docket indicates Parker’s Chapter 7 filing is currently “deficient,” as it lacks required supporting schedules.

Typically, the next steps would be the automatic appointment of a Chapter 7 trustee to oversee the assets of the estate.

Within 14 days, the estate must file the supporting schedules with the court detailing all assets, all liabilities, executory contracts and unexpired leases, and a statement of financial affairs.

Notably, any customer deposits are held at Piermont and should not be impacted by Parker's bankruptcy.

However, as has been seen in previous fintech bankruptcies, the failure of a fintech partner can and has impacted end users’ ability to access their funds.

The ability of and time needed for Parker’s small business customers to access any funds likely depends on how Parker's bank account offering was operationally structured — whether funds were held in an FBO at Piermont and ledgered by Parker (and/or a Parker service provider) vs. whether these accounts were held directly “on core” at Piermont.

Questions and requests for comment sent to representatives for Parker, Avalara, Patriot Bank, and Piermont outside of normal business hours did not receive a response for publication.

This newsletter is made possible thanks to the generous support of paying subscribers. In addition to supporting independent analysis of the banking, fintech, and crypto spaces, paying subscribers get an extended version of this newsletter and access to full archives of past issues (5+ years of newsletter goodness!)

You can support Fintech Business Weekly by upgrading to a paid subscription, or reach more than 90,000+ loyal readers by sponsoring a newsletter.

Coinbase’s Terrible, Horrible, No Good, Very Bad Week

Coinbase had a rough week: in a note laying off 14% of the company’s staff in advance of revealing a 30% drop in revenue and a $394 million loss in the first quarter, company cofounder and CEO Brian Armstrong pointed, in part, to AI, writing, “Non-technical teams are now shipping production code and many of our workflows are being automated.”

Less than a week after the layoffs, Coinbase experienced a nearly 8-hour outage, including the ability for users to trade on the crypto exchange.

Coinbase blamed a “a room overheating in an [Amazon Web Services] datacenter when multiple chillers failed” for the outage. So much for “decentralization,” I suppose.

Although Armstrong’s layoff note pointed to AI, describing a future vision of Coinbase as “an intelligence, with humans around the edge aligning it,” he also acknowledged the as-of-late lackluster state of crypto markets.

Armstrong wrote, “Crypto is also on the verge of the next wave of adoption, with stablecoins, prediction markets, tokenization, and more taking off. However, our business is still volatile from quarter to quarter. While we've managed through that cyclicality many times before and come out stronger on the other side, we’re currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth.”

The cyclicality Armstrong describes is crystalized by Coinbase’s quarter-to-quarter performance. The company’s revenue and net income are highly sensitive to cryptoasset prices, particularly bitcoin and ethereum, which comprised 40% and 19%, respectively, of trading volume on the exchange in the first quarter of 2026. Logical or not, users tend to trade more when asset prices are elevated.

The effect on Coinbase’s net income is compounded, as the company also holds crypto on its on balance sheet for investment. Per its most recent quarterly earnings statement, Coinbase holds 16,492 bitcoin and 150,193 ethereum.

The volatility in Coinbase’s primarily transaction-based business helps explain the company’s efforts to diversify by expanding its product offerings, including its recent push into prediction markets.

This January, Coinbase, via a partnership with Kalshi, launched Coinbase Predict, enabling users to speculate on the outcomes of events that include elections, politics, entertainment, and sports.

Stablecoin Roundup: Yield Compromise (Maybe), AML/Sanctions GENIUS Rulemaking, Brazil Bans Crypto For FX Settlement

Progress on the CLARITY Act, commonly described as crypto market structure legislation, has been stalled on a number of issues, most notably the topic of stablecoin “rewards.”

The “rewards” matter has been the subject of fierce, if disingenuous, debate between various stakeholders in crypto world, most vocally Coinbase and its CEO Brian Armstrong, and traditional banking world.

As an avatar for the crypto point of view, Coinbase and Armstrong have, confusingly, describing prohibiting stablecoin rewards as a “bailout” for banks.

Conversely, banks have latched on to an eye-popping if extremely unlikely risk highlighted in a U.S. Treasury Department report: namely, that as much as $6.6 trillion in deposits could be displaced from the banking system by stablecoins.

That, the banking industry argues, would be a catastrophe for their ability to lend to consumers and business.

The only issue with the “$6.6 trillion” claim? It represents the totality of checkable and demand deposits in the U.S. banking system. It seems exceedingly unlikely ALL consumers and businesses would entirely transition from holding funds in insured depositories to holding funds in stablecoins.

The core piece of the compromise text specifies:

“No covered party shall, directly or indirectly, pay any form of interest on yield (whether in cash, tokens, or other consideration) to a restricted recipient — (A) solely in connection with the holding of such restricted recipient’s payment stablecoins; or (B) on a payment stablecoin balance in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.”

However, the restriction would not apply to incentives paid “based on bona fide activities or bona fide transactions,” akin to how credit card issuers pay rewards based on purchase activity.

Coinbase CEO Armstrong, who has been a key agitator arguing “rewards” should be permitted, seemed to approve of the new language, posting regarding the updated bill, “Mark it up.”

Some in banking world, though, were less convinced.

A joint statement from American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America noted the groups appreciated legislators “address[ing] the concerns from banks of all sizes around the risk of deposit flight from paying yield on stablecoins,” but noted that the groups “will be sharing [their] detailed suggestions for strengthening the proposed language with lawmakers in the coming days.”

Despite the seeming compromise, a legal challenge from one or both sides seems likely if and when the bill is finalized and passed into law.

In other stablecoin news last week, the U.S. Department of the Treasury issued a joint notice of proposed rulemaking (NPRM) through the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) that would define the BSA/AML and sanctions obligations of permitted payment stablecoin issuers, as called for by the GENIUS Act.

Under the proposed rule, stablecoin issuers would be required to:

• establish and maintain an anti-money laundering and countering the financing of terrorism (AML/CFT) program;

• report suspicious activity;

• have the technical capabilities, policies, and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations;

• have the technical capabilities to comply, and do comply, with the terms of any lawful order; and

• maintain an effective sanctions compliance program.

Also last week, Brazil’s central bank, the Banco Central do Brasil, banned electronic foreign exchange/remittance providers from using cryptocurrencies, including stablecoins, for settling cross-border transactions.

The rule, promulgated by BCB Resolution No. 561 and taking effect on October 1, 2026, would not impact retail users’ ability to buy, sell, hold, or transfer cryptocurrencies or stablecoins.

Rather, the measure requires transactions between an electronic foreign exchange service and any foreign counterparty to be conducted by a foreign exchange transaction or a non-resident real-denominated account in Brazil. This functionally requires electronic foreign exchange providers to work through institutions authorized by the Brazilian central bank.

Impacts will include prohibiting a remittance service from accepting reais from an end users, converting them into stablecoins, and settling the transaction outside of Brazil via a blockchain transaction.

Paying Subscribers Only: Anthropic & FIS, Customers & OpenAI, Treasury Department Warns Binance

Core banking giant FIS announced a partnership with AI firm Anthropic centered on one of the trendiest areas in financial services at the moment: agents. But is the news more focused on building Anthropic’s narrative (and FIS’ share price) than substance?

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Hey all, Jason here.

Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

In this episode, Alex and I had the chance to discuss:

• If there’s one idea fintech founders can’t quit, it’s solving personal financial management. There’s a new wave of AI-powered PFM tools. But can they solve some of the fundamental challenges that have prevented a breakout company from emerging in the category?

• Bolt, the one-click checkout turned financial “super app,” is in the headlines, again, with further layoffs and as it struggles to pay its vendors. Why Americans don’t really want a “super app.”

• Congress actually tries to legislate: the bipartisan PACE Act could offer a pathway for non-banks to have direct access to payment rails. But, even if it were to become law (a big if), as a layer on top of existing requirements and at a time when getting a bank charter seems easier than ever, is the PACE Act fit for purpose?

• And, as always, what Alex and I just can’t let go of.

This is officially my last newsletter while still on my semi-sabbatical. I’m heading back to the Netherlands early next week, and I’m looking forward to getting back into the regular swing of things!

In the meantime, you should give this episode of Bank Nerd Podcast I recorded with Professor Dan Awrey and host Kiah Haslett a listen. W…

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I’m coming up on my last week or so here in Oaxaca. And while I’ve enjoyed my time, I am about ready to get back home and back to regular programming. I wasn’t expecting to write anything myself this week, as I have a guest essay from Knot cofounder and CEO Rory O’Reilly, but I think you’ll see why I had to take a break from my “sabb…

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Yes, I’m still in México, specifically Oaxaca, for another two weeks. I will say, my Spanish has markedly improved!

As I mentioned previously, the content of the newsletter will deviate from normal for the next couple weeks, with regular programming resuming on May 10th. I realize this week’s newsletter — my motion to dismiss in TomoC…

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I’m more than a week into my time in Oaxaca, and five days into Spanish classes. I’m doing a four hour class each weekday — four hours not looking at a screen is, pun intended, certainly a foreign experience.

If I were working this week, I’d check out this virtual event from Brex and Unit21 on building an “AI-native” compliance progra…

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Happy Easter / Santa Semana / Passover, to those who celebrate.

I’m bummed to have missed seeing folks at Fintech Meetup, but, I won’t lie, not sorry I missed having to spend several days in Las Vegas (and reading Alex Johnson’s recap, I feel like I’m still getting the key takeaways!)

I’ve made my way to Oaxaca, where I’ll be spending the next month or so. The ostensible purpose of the trip is to take Spanish language classes — so, I guess, next time you see me, quiz me to see what I can actually understand or say.

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Programming Note: I’m Taking A Sabbatical (Or, as Europeans call it, a vacation)

You’re probably wondering how I got here — doing whatever it is, exactly, that I do.

I really try not to make this newsletter about me, but rather about the financial industry topics I follow and care about. So indulge me for a moment while I deviate from that.

I started working when I was around 12 or 13 — the classic paper route, delivered by bicycling through the suburban neighborhood I grew up in.

At 15, I got a job at the local library, where I worked until I graduated from high school (minus a short, ill-fated stint at Best Buy, where my sister worked and which paid $2 more per hour. I hated it, and the library graciously took me back.)

My high school had a kind of weird split shift, due to overcrowding when I was a student there, meaning the school day had nine periods/classes, with the standard course load being seven classes. You could opt to take more, and I did — opting to take French and Latin during my first two years of high school, along with the rest of the regular curriculum (no, I cannot understand or speak either French or Latin at this point.)

I was also the kind of student who voluntarily took summer school, doing courses in the programming languages Visual Basic and Java. During my sophomore year, I took AP Computer Science, which, at the time, was taught in C++. I passed that AP test (barely, with a 3) — and no, I didn’t become a software engineer and probably couldn’t write a line of code today.

I did take more or less every AP class I could, apart from the serious math ones (I opted for AP stats rather than calculus), enabling me to start my time at Michigan State University with nearly 60 credits, or about half what was needed to graduate. I finished my program at MSU after three years, completing my degree with honors and as a member of the honors college.

I spent a couple years working at menial, entry-level jobs before attending University of Chicago for my master’s work in social science. Despite the degree program being full-time, I continued working at the job was I at, a local trade association, half-time, in order to enable me to take on less debt.

When I completed my degree, I left Chicago to serve as a Peace Corps Volunteer — yes, I was in the West Indies, St. Lucia specifically, but that isn’t to say I was on some kind of two-year beach holiday.

The pace of island life was substantially slower than what I was used to, and I used my ample spare time to drum up consulting clients, doing various digital marketing-related tasks and teaching myself the ins and outs of search engine optimization, pay per click marketing, and affiliate marketing (this was around 2008, so these were still relatively nascent fields. And yes, having a side hustle was definitely against Peace Corps policy.)

I returned to Chicago after Peace Corps, and operated as an independent contractor/freelancer for a while, before ultimately getting recruited by a Chicago area online lender, Enova, thus starting my journey in financial services. Having studied political science and sociology (and self-taught digital marketing), I knew next to nothing about how lending or banking worked.

In the 15 or so years since then, I’ve had the pleasure of working at a number of companies with extremely talented, capable individuals and have benefitted immensely from the chance to learn from them. As I’ve made my transition from hands-on operator roles to… whatever it is that I do now, I’ve continued to benefit from industry peers and colleagues who have been beyond generous by taking the time to share their experiences and expertise with me.

This really isn’t intended as a humblebrag or glorification of “hustle culture,” so much as some insight into my education, career, how I think, and why I do what I do.

Some days, when I stop and look back, I feel like I’ve been speed running life since before I was old enough to drive. Particularly once you start working for yourself, you realize there are no vacations, because there is always something you can be working on.

So really, this all is a preamble to say: I’m taking the next four weeks off from regular programming.

Rest assured, you’ll still see Fintech Business Weekly in your inbox each Sunday, but the nature and content of the upcoming editions will depart a bit from my standard format.

And fear not (or, depending on who you are, do fear), regular programming will resume on Sunday, May 10th.

Bolt Bloodbath: One-Third of Staff Fired As Company, Once Worth $11Bn, Struggles To Pay Its Bills

Bolt, the one-click checkout turned financial “super app” startup that was once valued at $11 billion and has raised a total of nearly $1 billion in capital, has laid off at least one-third of its staff, Fintech Business Weekly has exclusively learned.

Bolt has also terminated most of its independent contractors, some of whom have not been paid since January, and has struggled to pay vendors, including mission-critical ones like Amazon Web Services, since the start of the year, according to multiple sources familiar with the company’s operations and finances.

Bolt’s cashflow situation appears to have become so tenuous that, in mid-January, the company emailed staff to inform them about an “important new initiative” to “give [Bolt] employees and contractors a greater opportunity to participate directly in the long-term success of the company!” — by accepting company equity in lieu of their pay, per internal company communications reviewed by Fintech Business Weekly.

According to those communications, employees and contractors would receive shares at a 25% discount vs. Bolt’s share price at its next financing round, which, the January communication stated, the company “intend[ed] on closing out shortly.”

Bolt has not publicly announced any new financing since the communication and, the layoffs suggest, has been unable to succesfully obtain additional funding.

In a message posted by Bolt cofounder and CEO and Forbes 30 under 30 alum Ryan Breslow in the company’s Slack channel, shared with Fintech Business Weekly, Breslow pointed to AI in part to justify the layoffs, writing:

“Today, we made the incredibly difficult decision to say goodbye to about one-third of our team.

I want to assure you that we tried our absolute hardest to avoid this outcome. The leadership team and I have explored every possible avenue to retain as much of our team as possible. Despite our best efforts, this reset became unavoidable…

Going forward, Bolt will be operating as a much leaner organization and leveraging AI at our core. Developing products and operating in 2026 is very different than it was in prior years and we need to adapt as an organization to be leaner and more AI-centric than ever to keep with competition…”

This is hardly the first bad news Bolt and Breslow have faced:

• Bolt has already been through multiple rounds of layoffs, including in May 2022, November 2022, January 2023, and December 2023.

• Bolt investor Activant Capital sued Breslow in 2023, alleging he personally took a $30 million secured by Bolt and defaulted on it, causing millions in losses for the company. The suit was eventually settled with Bolt canceling roughly $37 million worth of Breslow’s shares and buying out Activant’s stake in the company.

• Bolt’s controversial fundraise attempt, spearheaded by Breslow, in which the company tried to raise $450 million, $250 million of which took the form of “marketing credits.” The proposed deal pressured existing investors to put money in at a $14 billion valuation or see their existing stakes rendered essentially worthless, a tactic known as a “cramdown.”

• Bolt faced an investigation from the Securities and Exchange Commission, following allegations from Brian Reinken of WestCap Management and Arjun Sethi of Tribe Capital Management that Breslow misled the companies during its Series E fundraise.

• Breslow’s involvement with a “decentralized autonomous organization” called Movement DAO. Movement hired a developer with a public record of wire fraud and money laundering, who, legal filings claim, stole approximately $16 million in funds from the organization.

• Breslow’s involvement with Love, originally pitched as a DAO where users could discuss and support homeopathic and other pharmaceutical alternative treatments. Love ultimately pivoted from that idea and is currently an ecommerce site for unregulated supplements.

• Breslow’s involvement with Eco, which was originally a stablecoin-powered neobank that marketed its lack of FDIC insurance as a feature, while telling users that yield was generated by lending their funds to “tier 1 institutions like Fidelity and Goldman.” In reality, Eco worked with BlockFi and later Wyre, meaning customer funds likely went to high-risk entities like FTX, Alameda, and Genesis (all now bankrupt), as well as DeFi protocols like MakerDAO and Compound.

At least some of the company’s staff were notified of the layoffs the same day that Breslow took the stage at an industry conference to opine on the question, “Do consumers actually want a single platform to manage shopping, payments, identity, and rewards?”

The answer to that question, based on Bolt’s traction in the market, appears to be no.

While Bolt has repeatedly boasted of having a “network of 80+ million US shoppers,” available data suggest adoption of its app falls orders of magnitude short of that lofty claim.

The company officially announced its super app in April 2025, with the app becoming generally available in September 2025.

But Google Play, the app store for Android users, shows a mere 5,000+ downloads of Bolt’s super app and just 21 reviews — half of which are one star. Apple’s App Store doesn’t display a number of downloads, but shows that the Bolt app has 190 ratings, many of which appear to be fake.

As a point of comparison, second-tier banking app MoneyLion has over 300,000 ratings on the Apple App Store and 5+ million downloads on Google Play.

The lack of adoption may have something to do with Bolt’s lackluster functionality.

When Bolt announced its super app about a year ago, it described it as offering a “robust feature set,” including, in the company’s own words:

• Crypto, One-Click Away: Bolt is the easiest way to buy, sell, send, and receive major cryptocurrencies—including Bitcoin, Ethereum, USDC, Solana, and Polygon—directly within the app. Every user is provisioned an on-chain balance powered by ZeroHash,** with full visibility into real-time balances and confirmations.

• Supercharged Bolt Rewards Debit Card and Smart Rewards: The Bolt Debit Card comes with a unique super-rewards program including up to 3% direct cash back on eligible purchases, and up to 7% in Love.com Store Credits.***

• Lightning Fast Peer-to-Peer Payments: With just a single click, users can process peer payments securely, exchanging funds simply and with confidence.

• Enhanced Bolt Account & Order Tracking: A sleek new experience for 80M+ shoppers, including real-time order tracking.

Bolt partnered with Midland States Bank and middleware platform Synctera to support its banking and debit card functionality.

Midland recently fired its chief financial officer over accounting irregularities tied to loans originated through its fintech partners. The accounting problems do not appear to have anything to do with Bolt, as Bolt’s offerings through the bank do not include any credit-related products.

Concurrently with Bolt’s launch of its super app, Synctera announced its relationship with the company, describing Bolt as Synctera’s “largest customer to date.”

Despite describing its offering as “the first-of-its-kind all-in-one financial services app,” Bolt’s super app lacks any meaningful differentiation vs. other widely used neobanks, like Walmart’s OnePay or Current, or digital wallets, like Venmo and Cash App.

The package tracking feature is a less common one, but it is something offered directly within Apple Wallet and by popular buy now pay later service Klarna.

Bolt’s clunky onboarding user experience may also help explain its lack of traction with consumers.

Bolt leverages a commonly used identity verification vendor as part of its onboarding flow, but, curiously, surfaces that process in a browser-based pop up modal, rather than natively integrating into its app. The result is an experience that is frustrating and difficult to navigate in order to input required information like name, address, Social Security number, and so forth.

Bolt also requires users to submit significantly more information than many other fintech and banking apps as part of the onboarding process, including employer name, occupation, industry, citizenship, expected monthly deposits, expected monthly withdrawals, purpose of account, and annual income.

Beyond the onboarding process, users’ reviews of the app complain that they are forced to reenter their email address and login every time they open the Bolt app — an irritating UX quirk Fintech Business Weekly also experienced during its review and testing of the app.

The AI shopping feature, admittedly labeled as a “beta” functionality, arguably is the most unique aspect of Bolt’s super app. The only problem, though, is it isn’t very good.

Bolt’s AI shopping tool suggests potential searches like “phone charger” and “wine glass.”

But actually searching for those items on the app returns only a handful of results, some of which are entirely unrelated. For example, searching for “wine glass” offered results that included a “Looking Glass” on lindas.com and a “Mug Tester” bizarrely showing as being for sale on Palantir.com.

Results for “phone charger” included a $49.95 candle diffuser on love.com, the online retailer also founded and run by Bolt CEO Breslow.

While Bolt appears to have few real customers, these users, if they completed the identity verification process required, have accounts and cards at Midland States Bank — and, potentially, deposits.

Questions and requests for comment sent to Bolt, middleware provider Synctera, and Midland on Friday, including about contingency planning should Bolt be forced to shut down, did not receive responses as of the time of publication.

Bolt Launches Lawsuit Against Its Own Former CEO

While Ryan Breslow cofounded Bolt and was its original CEO, he stepped down after a controversial series of posts he made attacking startup accelerator Y Combinator and payment processor Stripe, describing the companies as the “mob bosses of Silicon Valley.”

Following backlash to Breslow’s commentary, he moved into a role as executive chairman, and Bolt COO Maju Kuruvilla, who had previously done stints at Amazon and Microsoft, was promoted to CEO. Kuruvilla served in that role until early 2024, when the board replaced him with the company’s head of sales, Justin Groom. Breslow ultimately replaced Groom, returning as CEO in early 2025 to drive the pivot to the super app strategy.

At the time he left the company, Kuruvilla’s departure was described as “amicable.” He went on to found his own startup, AI ecommerce enablement platform Spangle.

This January, Kuruvilla and Spangle made news by raising $15 million in funding at a $100 million valuation.

Just weeks later, Bolt filed a lawsuit against Kuruvilla and his company in California state court, Fintech Business Weekly can be the first to report.

Bolt’s suit attacks Kuruvilla personally and aggressively, with the introduction of the complaint stating (emphasis added and spacing adjusted):

It turns out that the only things Kuruvilla was good at were: spending over $300 million while driving Bolt’s valuation down; working to enrich a single group of activist investors to the company’s (and other shareholders’) detriment; and spending a vast majority of his time (and over $100 million of Bolt’s money) to create technology that he could then steal for SpangleAI.

For years, Kuruvilla repeatedly lied to the Board, claiming that he was “all in” and working to “make Bolt a $100 billion company”; behind the scenes, he was secretly working with a group of activist investors to sell the company for parts, which would help those investors at the company’s expense.

According to the suit, upon his termination, Kuruvilla received a $12 million cash payment, which included the accelerated vesting and repurchase of his shares in the company, in exchange for signing a separation agreement reaffirming his broad confidentiality, invention assignment, and non-disparagement obligations.

The suit — filed nearly two nears after Kuruvilla and Bolt parted ways — accuses Kuruvilla of “a multi-year scheme of disloyalty, fraud, theft of confidential information, and trade secret misappropriation.”

The crux of the allegations in the 22-page complaint is that Kuruvilla was “secretly working with a group of activist investors,” described in the filing only as “Investor Group 1,” in an attempt to drive down Bolt’s valuation and avoid meeting certain financial milestones, such that the investors could avoid a contractual obligation to invest additional funds into Bolt while maintaining their existing preferred shares in the company.

The complaint alleges Kuruvilla’s actions to further the scheme included:

• Kuruvilla, acting at the direction of Investor Group 1, thwarting a board-authorized share repurchase from two early investors that would have supported the company’s on-paper valuation;

• Kuruvilla, working with Investor Group 1, working to block a tender offer that would have raised additional capital for Bolt;

• and that Kuruvilla worked with Investor Group 1 to “hatch[] a plot to use a substantial portion of the company’s funds to force Mr. Breslow out and buy back his shares,” among other allegations.

As mentioned above, the suit further alleges Kuruvilla inappropriately leveraged Bolt trade secrets and proprietary information, including customer lists, investor lists, product plans, coding strategies, and other trade secrets, to build and launch his new firm, Spangle.

Bolt’s suit alleges breach of contract, breach of fiduciary duty, and misappropriation of trade secrets, among other causes of action.

Kuruvilla and Spangle have not yet made any court filings in response to Bolt’s lawsuit. Kuruvilla, reached via email on Friday, declined to provide a comment about the suit for publication.

This newsletter is made possible thanks to the generous support of paying subscribers. In addition to supporting independent analysis of the banking, fintech, and crypto spaces, paying subscribers get an extended version of this newsletter and access to full archives of past issues (5+ years of newsletter goodness!)

You can support Fintech Business Weekly by upgrading to a paid subscription, or reach more than 90,000+ loyal readers by sponsoring a newsletter.

Victims of Evolve’s Russian Cyberransom Hack Begin Receiving $28 Settlement Payments

In June 2024, a Russia-linked cyberransom group, Lockbit, claimed to have hacked the Federal Reserve and threatened to release the files if it it wasn’t paid.

Lockbit did release files, but it wasn’t the Fed the group had hacked — it was Evolve Bank & Trust.

The group had penetrated Evolve’s systems in February 2024, but the bank didn’t detect that its systems were compromised until the end of May.

A regulatory filing Evolve made in Maine indicated the breach compromised data on 7,640,112 persons.

But a filing as part of the data breach class action settlement reached last September suggest the real number of impacted persons is an order of magnitude higher, with settlement administrator Kroll saying it identified 17,880,046 unique records of impacted persons, based on the files Evolve supplied it with.

It is difficult to overstate both the scope and the severity of the breach, given the extensive number of third-party fintech programs Evolve worked with — the bank supported more than 1,000 programs, many of which operated through Evolve’s third-party service providers, like Synapse (bankrupt), Solid (bankrupt), Bond (acquired by FIS), and others.

Major names in fintech that include Stripe, Wise, Affirm, Dave, Bilt, and Mercury have partnered with the bank and had customer data compromised in the hack.

Data elements leaked included: name, address, phone, email, Social Security numbers / employer identification numbers, account numbers, card numbers, account balances, transaction histories, and even KYC/KYB documentation like images of drivers licenses/passports, company incorporation documents, and “selfie” images and videos.

But it wasn’t just fintech programs that had information released onto the dark web.

As much as 33 terabytes of data was exfiltrated from Evolve’s systems, with information security professionals Fintech Business Weekly spoke to around time of the hack indicating that Evolve’s Azure tenant was compromised, allowing the hackers to make copies of most or all of the bank’s virtual machines, including those running its website, SFTP, SQL server, as well as information from its core banking system.

For context, a single 233 megabyte file that appears to be an export from Synapse’s systems reviewed by Fintech Business Weekly has records with name, address, SSN/EIN, phone, email, and other key data points for more than 1.4 million individuals and businesses.

Sources who reviewed the leaked files at the time indicated they contain ACH and wire files, settlement files, card primary account numbers (PANs), and card transaction records, and described the situation as “as bad as it gets.”

Evolve’s own internal data and files were also compromised, including documents related to confidential regulatory exams and internal audits.

Evolve’s own employees were also victims here. Archived backups of employees’ Outlook inboxes — including correspondence with Evolve customers but also personal messages — and personal files stored on Evolve systems were compromised in the breach.

The class action settlement, reached last spring, established “an $11,858,259.98 non-reversionary common fund, which will be used to pay Valid Claims for Settlement Class Member Benefits, administrative expenses, any Attorneys’ Fees and Costs, and Class Representative Service Awards approved by the Court, as well as any applicable taxes.”

The approximately $11.9 million settlement is inclusive of attorneys’ fees, which typically range from 20% to 30% of the settlement amount.

The settlement agreement offered victims, apart from the few who chose to opt out of it, two options:

• reimbursement of actual losses incurred as a result of the Data Incident up to $3,000 per Claimant (i.e., Documented Losses Payment), or

• an estimated $20.00 pro rata Flat Cash Payment.

A $20 flat cash payment, if all 17,880,046 persons identified by Kroll actually received that amount, would work out to $357,600,920 — far in excess of the $11.9 million the total settlement amount Evolve actually paid.

But, according to Kroll’s filings in the case, only about 250,000 persons the claims administrator attempted to reach out to actually completed the paperwork necessary to receive compensation.

So, how much did victims of Evolve’s data breach — who received notification and filed the necessary paperwork — actually get?

Per widespread posts on social media, $27.92.

Asked by email if Evolve employees who had sensitive personal information compromised in the hack were identified and compensated as part of the settlement, an Evolve spokesperson didn’t respond.

Have tips or information you want to share? You can reach me via secure messaging app Signal at mikulaja.01 or encrypted email at fbw.tips@protonmail.com

Everything Else: Monzo Quits U.S., Cash App’s P2PBNPL, ICBA Opposes Coinbase Charter Approval (Paid Subscriber Exclusive)

British digital bank Monzo is declaring independence — from the United States. The company best known for its hot coral-colored (coloured?) debit cards is throwing in the towel after nearly seven years of trying and failing to make inroads with American consumers.

When it launched in the summer of 2019, Monzo did so via partner bank Sutton.

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Hey all, Jason here.

Alex Johnson, creator of the Fintech Takes newsletter, and I are happy to bring you the latest episode of our monthly podcast, Fintech Recap, where we unpack some of the biggest stories in fintech, banking, and crypto.

In this episode, Alex and I had the chance to discuss:

• Rent rewards and neighborhood loyalty startup Bilt’s rocky transition from Wells Fargo to Column and Cardless

• The “graduation problem” in banking-as-a-service

• The New York legislature’s decision to step into the CFPB’s shoes by introducing a financial data rights law

• And, as always, what Alex and I just can’t let go of

Unfortunately, this will be my last newsletter from Mexico City. It’s been an amazing six weeks here (well, with some side trips). Next, I’m heading to the state of Oaxaca for about a month, where I’ll be taking an immersive Spanish language course. There may be some slight programming tweaks to the newsletter during April, but, rest assured, I’ll still be in your inbox every Sunday morning.

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16 April — Blueprint to Building AI into AML Workflows

Partner content: What does it take to get AI in AML right and keep pace with shifting regulatory expectations?

Join our fireside chat on April 16 to hear compliance experts break down what it actually takes to get AI-powered AML right, including the the non-technical factors that determine success or failure: governance, model validation, policy alignment, QA/QC, and change management.

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Did Stripe Subsidiary Bridge Ship 12 Mitsubishi Trucks to Venezuela?

A company spokesperson says it didn’t, but shipping and customs records say that it did. The true identity of seller/shipper of the twelve vehicles remains unknown at this point.

But, on the two bills of lading associated with the shipments, MAEU233249807 and MAEU233733845, Bridge Ventures Inc. is listed as the seller/shipper. Most data on bills of lading typically comes from the seller/shipper of the goods.

Each of those bills of lading (commonly abbreviated B/L or BOL) show a shipment of two containers, each holding three Mitsubishi trucks, for a total of 12 trucks across the two shipments, per customs records.

Both BOLs show the shipments originated in Jebel Ali, Dubai Port, United Arab Emirates, with a destination of Puerto Cabello, Venezuela. The shipments were facilitated by freight forwarder Globelink West Star Shipping, with the containers traveling on Maersk vessels.

The ultimate recipient/buyer on both BOLs is Thundernet, C.A., a Venezuelan internet service provider, listing an address in Barinas, Venezuela.

From the UAE, both shipments were routed via Tanger, Morocco, and passed through a port in Newark, New Jersey, thus appearing in U.S. customs records.

MAEU233249807 passed through Newark on December 29, 2023, and arrived in Venezuela on January 1, 2024. The second shipment, MAEU233733845, passed through Newark on January 26, 2024, and arrived in Venezuela on February 1, 2024.

Regulations like the Bank Secrecy Act and the PATRIOT Act do not apply directly to freight forwarders or shippers.

But, given the risks of trade-based money laundering and sanctions evasion, stakeholders involved in facilitating shipping transactions — seller/shipper, buyer/consignee, financial institutions facilitating payment, freight forwarder, and shipper — have varying regulatory exposure, including under OFAC, and thus typically implement appropriate risk-based controls.

Interagency guidance issued in 2023 by the Department of Commerce, Department of Treasury, Department of Justice, and Department of Homeland Security outlines “Know Your Cargo” best practices.

The guidance specifies that “[e]ntities operating in maritime and other transportation industries—including transportation companies, maintenance companies, insurance providers, other financial institutions, and other entities involved in funding and facilitating the transport of cargo—are therefore strongly advised to know your cargo, i.e. to institute or confirm the existence of appropriate compliance measures” to protect against the manipulation of location or identification data, the falsification of cargo and vessel documents (including bills of lading and invoices), ship-to-ship transfers, voyage irregularities, frequent registration changes, and complex ownership structures.

The joint guidance advises that “[i]ndividuals and entities who participate in maritime and other transportation industries should implement and strengthen compliance controls as necessary” and emphasizes that “[s]uch controls are especially critical when operating near or in geographic areas determined to be high-risk.”

Examples of suggested compliance practices include:

• Institutionalizing sanctions and export control compliance programs;

• Establishing location monitoring best practices and contractual requirements;

• Exercising supply chain due diligence; and

• Implementing “know your customer” processes that include conducting appropriate risk-based due diligence on counterparties, based on a given party’s

  role in a transaction.

Additional OFAC guidance issued in 2024 on sanctions compliance for entities in the maritime industry emphasizes that “[t]o address risks such as the manipulation of vessel location data, document falsification, and vessel ownership obfuscation, many industry stakeholders have implemented sanctions compliance practices such as conducting additional due diligence on vessel ownership and using enhanced tracking systems for vessels and cargo.”

Trucks Were Shipped To Business Owned By Family With Deep Ties To Venezuelan Government, Siblings of Hugo Chávez

The contact information listed on the bill of lading includes a Gmail, rather than a corporate, email address — and the same address appears for both the seller/shipper and the buyer/consignee.

Maritime industry experts indicated it isn’t necessarily unusual for the same contact information to be listed for seller/shipper and buyer/consignee, but that a personal rather than corporate email address is not common. Still, in developing countries, including Venezuela, it is not unusual to use commercial services like Gmail or Hotmail as official business contact addresses.

When asked about the two shipments, Globelink West Star, the freight forwarder, directed further inquiry to Atef Salami Nemer Hirchedd, though the Gmail address supplied appears to belong to Omar José Nemer Irched, the eldest son of Atef Salami Nemer Hirchedd.

Originally hailing from Syria, Atef Salami Nemer Hirchedd and his family have developed a sprawling business empire, comprising more than 50 companies in Venezuela, Panama, and the United States, according to reporting in 2021 from investigative journalism outfit Armando.info. According to that report, at least 16 of the companies appear on the Venezuelan National Registry of Contractors, which companies seeking to bid on government contracts must register with.

Grupo Nemer’s businesses include construction and real estate, automative companies (including dealerships), and agricultural interests.

The Nemer family also has close ties with the Venezuelan government and current and former high-ranking politicians and officials. Adelis Chávez, the youngest brother of former Venezuelan President Hugo Chávez, has been described as owning the Barinas-based Zamora Futbol Club and served as the club’s president beginning in 2009.

Adelis was still listed as the team’s president as recently as 2020. Sometime between 2020 and 2025 Omar José Nemer Irched — whose email address appears on the BOLs — became president of the team. He presently remains in that role.

Zamora Futbol Club, now sponsored by Grupo Nemer-owned Thundernet, was previously sponsored by the Venezuelan state-owned oil company, PdVSA.

The report from Armando.info also alleges that Atef Salami Nemer Hirchedd has long had a close relationship with another brother of former President Hugo Chávez, Adán Chávez Frías, who served as the country’s ambassador to Cuba from 2004 to 2006 and 2019 to 2023. Adán Chávez Frías also served two stints as governor of the state of Barinas, the headquarters of many of Grupo Nemer’s businesses, from 2008 to 2016 and from 2025 to the present.

The reporting from Armando.info alleges that Atef Salami Nemer Hirchedd’s relationship with government officials facilitated Grupo Nemer entering into a “strategic alliance” to take over a portion of the operations of bankrupt state-owned agriculture company Agropatria in 2020. Venezuela’s Anti-Blockade Law, intended to shield private companies in the country from potential U.S. sanctions, require that details of the alliance be kept confidential.

In response to that 2021 report, Atef Salami Nemer Hirchedd acknowledged close ties to the Chávez family, but denied the relationships played any role in his business success, writing (translated from Spanish and emphasis added), “Linking my businesses to the Chávez family, with whom I have long-standing friendships dating back to before some of its members held power, without demonstrating or providing any evidence of a single connection or commercial link, much less influence peddling or any scheme to gain an advantage through the State, makes the malevolent intentions of this lengthy and convoluted report abundantly clear.”

The close ties to Hugo Chávez and his family and the interest in a formerly state-owned agriculture business aren’t the only red flags tied to Grupo Nemer.

Another Grupo Nemer company, payment processor Representaciones Best Pay C.A., has been implicated in a corruption and money laundering scandal tied to Venezuelan bank Banco del Tosoro.

A 160-page report alleges that Representaciones Best Pay C.A., in which Omar José Nemer Irched is a partner, was part of a network known as “Los Jinetes del Tesoro” (“The Treasury Riders”) that conspired to create a “fraudulent monopoly” over point-of-sale processing in Venezuela.

The report claims that the scheme recruited key private sector actors, including senior bank executives, and public officials from the country’s financial regulator, SUDEBAN, who granted the payment processors relevant licenses allowing them to capture nearly half of the point-of-sale market in the country, despite significant irregularities.

Finally, Thundernet, the internet service provider named on the BOLs, began operations in 2015. The company, registered with the Venezuelan telecommunications regulator CONATEL, has steadily expanded, both geographically and in the services it offers. In addition to internet connectivity, Thundernet also offers streaming TV, with over 160 channels, cybersecurity services, and merchant point-of-sale terminals and processing.

Bridge, Which Touted Venezuelan Market Opportunity, Denies Any Link To Truck Shipments

When these shipments were made, in late 2023 and early 2024, Venezuela was already facing broad U.S. and international sanctions programs, including the Venezuelan government itself, as well as persons associated with the government, state-owned oil company PdVSA, and “any person who has acted or purported to act directly or indirectly for or on behalf of” PdVSA or the Venezuelan government.

Despite the challenge of complying with the far-reaching sanctions on Venezuela, executives from Bridge and its parent company, Stripe, lauded the country as an example of the potential for stablecoins as recently as November 2025.

It was apparently only after Bridge’s and Stripe’s relationship with Venezuelan crypto exchange Kontigo came to light — and as Bridge seeks to operationalize an OCC-chartered trust bank — that the stablecoin infrastructure provider increased the risk rating it assigned to Venezuela.

To be clear, the company listed on the BOLs, Thundernet C.A., Atef Salami Nemer Hirchedd, and Omar José Nemer Irched do not appear on OFAC’s Specially Designated Nationals list.

However, there is a strong argument various program-level sanctions on the country could cover Atef Salami Nemer Hirchedd, Omar José Nemer Irched, and/or the family’s companies. Further, the sprawling and opaque corporate structure, involving entities not only in Venezuela, but also in Panama and the United States, makes undertaking due diligence and verifying ultimate beneficial owners, or UBOs, incredibly difficult.

Asked about the documents that appear to link Bridge to a potential sanctions evasion scheme benefiting a company with likely ties to the Venezuelan government, a Bridge spokesperson shared the following statement via email (emphasis added): “Whatever this is about, it has nothing to do with us: Bridge had no involvement in this shipment or any associated payment activity. The only explanation we can think of is some clerical error or confusion around a common name like Bridge.”

Still, on the heels of the Kontigo scandal, the newly discovered potential links between the stablecoin infrastructure platform and Venezuela seem likely to bring additional unwanted scrutiny as Bridge works to operationalize its recently conditionally approved national trust bank charter.

Multiple emails with questions and request for comment sent to addresses associated with Atef Salami Nemer Hirchedd/Omar José Nemer Irched and Grupo Nemer received no response as of the time of publication. Calls to a number associated with Atef Salami Nemer Hirchedd/Omar José Nemer Irched and Grupo Nemer went unanswered.

Have tips or information you want to share? You can reach me via secure messaging app Signal at mikulaja.01 or encrypted email at fbw.tips@protonmail.com

Sen. Warren Asks MrBeast About Step Marketing Crypto to Children

Step, the teen banking app acquired by YouTuber MrBeast, encouraged minors to manipulate their parents to let them buy crypto.

The company, which describes its mission as to “improve the financial future of the next generation,” pushed dubious crypto investments on children, including so-called “memecoins” like Dogecoin and non-fungible tokens (NFTs).

Step announced the launch of crypto trading in April 2022, describing itself at the time as “the first financial app that will allow both teens under 18 and young adults to buy, sell, hold and receive crypto.”

Step quietly shut down its crypto offering in 2024.

The issue is resurfacing now, in the wake of MrBeast’s acquisition of the company, following Senator Elizabeth Warren (D-MA) sending a letter to MrBeast (Jimmy Donaldson) and the CEO of Beast Industries, Jeff Housenbold.

According to Warren’s letter, in 2022, Step published a series of Youtube videos targeting children and young adults on topics that included:

• How People are Making Millions Off NFTs

• Everything You Need to Know About Bitcoin

• 3 Must-Know Crypto Terms

• 3 Facts About Bitcoin That You Didn’t Know

The company even published a video titled “How to Talk to Your Parents About Investing in Crypto” that, according to Warren’s letter, “coache[d] children on how to convince their parents to let them make investments their parents may not want and includes specific scripts for children to use while talking to their parents.”

In her letter, Senator Warren is seeking information and poses a number of questions to MrBeast and Housenbold, the company’s CEO, including:

• If Beast Industries intends to allow users of Step to invest in or hold cryptocurrency or NFTs?

• What changes does Beast Industries intend to make at Step?

• How does Beast Industries plan to advertise Step and grow Step’s user base?

• How will Beast Industries protect users’ funds should there be any future liquidity concerns with Step, Evolve, or any of their intermediaries?

• Why did Step choose to partner with Evolve?

This newsletter is made possible thanks to the generous support of paying subscribers. In addition to supporting independent analysis of the banking, fintech, and crypto spaces, paying subscribers get an extended version of this newsletter and access to full archives of past issues (5+ years of newsletter goodness!)

You can support Fintech Business Weekly by upgrading to a paid subscription, or reach more than 90,000+ loyal readers by sponsoring a newsletter.

Everything Else: FTC Warns Stripe, PayPal, Visa, Mastercard On “Debanking,” Coinbase Pushes Back on Stablecoin Yield Compromise

Last week, Federal Trade Commission Chairman Andrew Ferguson sent letters to the CEOs of PayPal, Visa, Mastercard, and Stripe, pointing to Trump’s recent “debanking” executive order and “warn[ing] the companies that any act or practice to deplatform customers or deny them access to financial products or services, or to facilitate such conduct by other companies, that is inconsistent with their terms of service or a customer’s reasonable expectations may violate the FTC Act and could lead to an FTC investigation and potential enforcement action.”

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Hey all, Jason here.

In this episode, I had the chance to chat with Tyler Allen, the chief operating offier at Unit21. We had the chance to discuss:

• How fintech, financial crimes compliance, and software engineering have evolved since Tyler joined Unit21 back in 2019

• The limitations of addressing compliance challenges by throwing bodies at them

• How regulators are thinking about agentic AI

• What an AI-first approach to compliance looks like

• And much more!

I’m looking forward to a beautiful spring week in Mexico City — my favorite time of year. This will be my last full week here, before I’m on to my next stop, so I plan to make the most of it.

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From Alerts to Action: The Rise of Autonomous AI in Financial Crime

Partner content: Alerts aren’t the problem—execution is.

As volumes grow, risk teams are under pressure to investigate faster and deliver defensible outcomes. AI is changing how that work gets done.

Hear from leaders at Equifax, FS Vector, Liminal, and Unit21 on March 25 as they discuss how AI agents are transforming financial crime operations from insight to action.

If AI is on your roadmap, this is a timely conversation to help validate your approach.

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CinCin: Cheers to Money Laundering

“Cin cin” is a popular toast in Italian — the equivalent of saying “cheers” when you clink glasses. It is also the name of a Telegram-based “no KYC” crypto card service.

The company, which does business under the name CinCin Exchange, is officially known as Sonder Inc., according to its terms and conditions, and is legally based in the tiny Republic of the Marshall Islands.

CinCin appears to specifically target its services to Russian and Ukrainian speakers and even has influencer marketing partnerships with comedian Danila Poperechny, YouTuber Petya English, and rapper KyivStoner.

CinCin operates much the same as other so-called “No KYC” crypto spending cards.

Users can fund a wallet on the platform by depositing popular crypto or stablecoin assets, including USDT (Tether) on the Tron blockchain. The Tether/Tron combination is generally understood to be the preferred vehicle for illicit activity, owing to the speed and lower costs of Tron vs. other blockchains and deeper liquidity of Tether on Tron specifically.

Analysis of wallet addresses associated with CinCin suggest the company has seen more than $5 million in deposits via Tron between February 6th and last week — and this number only takes into account a single token on a single chain.

CinCin users aren’t constrained to using stablecoins. They can also deposit bitcoin, ether, and even President Trump’s “memecoin,” $TRUMP.

Users can choose from cards issued on BINs targeted for use in making payments for digital ads (Google Ads, Meta, etc.), making game-related payments for services like Playstation, Steam, and Epic Games, making general online payments, and for use via Apple Pay or Google Pay, including for in-person transactions.

Exact capabilities and costs vary by BIN. For example, a BIN described as being for “ChatGPT / Online Card” carries a setup fee that includes $25 USDT for card issuance and a $2.25 “network” fee, a 4.5% commission on cryptocurrency top-ups, and a per transaction fee of $0.25 (plus 0.4% when paying via Apple Pay).

Users are permitted to spend as much as $2,000,000 per card per month.

There are obviously legitimate use cases for making card payments at these kinds of vendors, but online advertising spend and gaming platforms can also serve as mechanisms to attempt to clean or disguise the source of illicit funds.

Test transactions run on cards from two of the BINs offered show both were issued by Singapore-based Sunrate: one via its Hong King-licensed entity, and the other via Sunrate’s U.K.-licensed entity.

CinCin isn’t the first “no KYC” crypto card tied to Sunrate. A Fintech Business Weekly review of no KYC card providers earlier this year found cards issued by Sunrate tied to PayWithUs, ekame, nokyc.card, and UnCash.

Sunrate offers a banking-as-a-service-like global treasury management and payments platform, including programmatic corporate card issuing capabilities. The company is backed by investors like SoftBank, Redpoint China, China Growth Capital, and Aramco Ventures, the investing arm of the Saudi state oil company.

Sunrate holds a variety of types of licenses across numerous jurisdictions, including a major payment institution license in Singapore, a payments business license in mainland China, a money services operator in Hong Kong, and an e-money institution license in the U.K. The company’s U.S. entity is also registered as a money services business with FinCEN.

A representative for Sunrate did not respond to questions and a request for comment sent Friday morning, U.S. time.

CinCin Leverages Known Bluebanc/Sutton Loophole

Sunrate isn’t the only institution CinCin is using to issue cards.

Its “Game Card,” described as intended for use on game platform accounts in the U.S. specifically, is a corporate card issued by Sutton Bank via its relationship with program manager Bluebanc — the same avenue exploited by fellow “no KYC” crypto card provider PayWithUs, which Fintech Business Weekly publicly reported on in early February.

In February, Fintech Business Weekly explained:

Corporate card programs offer an easy-to-exploit loophole, in that, once the company entity has been onboarded to a program, cards can be created for individual employees, contractors, and so forth — typically without any additional verification of those individuals’ information or that they have a bona fide relationship with the company.

The challenges of policing this gaping loophole are amplified by the nested structures common in bank sponsorship, issuer-processor, and program management relationships.

Responsibility for BSA/AML compliance is often passed down a chain of partners, with collection of necessary information typically resting with the user-facing entity. But, all too often, the data doesn’t flow back up to the regulated entity — the bank — standing behind a given card program, blinding financial institutions to the true risks hidden beneath multiple layers of service providers.

The “Nth party” risk management issues posed by these relationships should already be well known and well understood after the 2022-2024 wave of consent orders focused on BSA/AML and third-party risk management failures in bank-fintech partnerships.

Sutton itself has been operating under a consent order it entered into with the FDIC in February 2024, stemming from a variety of issues, including the bank’s BSA/AML compliance and third-party risk management.

Despite entering into that consent order more than two years ago and being made aware of ongoing weaknesses in its controls in February, if not earlier, CinCin’s “no KYC” cards, issued by Sutton, were available and working as of mid-day Friday. (By mid-day Saturday, following inquiries to Sutton and Bluebanc, the card no longer worked.)

Asked about CinCin, a spokesperson for Sutton said that the bank is “undergoing a full remediation with BlueBanc, and review of all corporate expense programs to ensure appropriate oversight and operation of all downstream programs.”

The spokesperson added that “[Sutton has] no tolerance for any variant of ‘no KYC’ programs. Any program that isn’t operating appropriately will be shut down immediately.”

A spokesperson for Bluebanc emphasized it has no relationship with CinCin and said that the cards that appeared on the service “appear to have been illicitly obtained through a third party and then redistributed via unauthorized channels.”

The Bluebanc spokesperson added that the company is working to tighten its controls, including by engaging an external consultant, improving its application and card creation process, and implementing new KYB/KYC data sources.

Representatives for Mastercard did not respond to questions and requests for comment for this story.

This newsletter is made possible thanks to the generous support of paying subscribers. In addition to supporting independent analysis of the banking, fintech, and crypto spaces, paying subscribers get an extended version of this newsletter and access to full archives of past issues (5+ years of newsletter goodness!)

You can support Fintech Business Weekly by upgrading to a paid subscription, or reach more than 90,000+ loyal readers by sponsoring a newsletter.

New York Legislature Introduces Financial Data Rights Bill

Last week, New York legislators in both the state assembly and senate introduced a bill that would require covered financial institutions to make consumers’ and small business’ financial data available in secure, machine-readable electronic format at no cost, including to an “authorized representative” acting on their behalf.

The measure seeks to avoid some of the challenges the Consumer Financial Protection Burea’s 1033 open banking rulemaking has faced by spelling out, in the bill itself, that consumers may employ third-parties — like data aggregators Plaid and MX — to act as their “authorized representative.”

The bill defines this term broadly as meaning “any person or entity, other than the financial institution holding the data, that seeks to access covered data with the consumer’s or small business’s consent pursuant to section eight hundred three of this article.”

The bill imposes specific requirements on “authorized representatives,” including that they:

• obtain express, informed consent in order to access data on behalf of a consumer or small business;

• provide a simple, transparent mechanism for users to view and revoke data sharing authorizations at any time;

• must limit their collection, use, and retention of covered data to what is reasonably necessary to provide users’ requested product or service; and

• must maintain an information security program that satisfies the requirements of the Gramm-Leach-Bliley Act.

The text of the bill also explicitly prohibits fees, arguably the biggest point of contention in the CFPB open banking rulemaking. Section 1033 of Dodd-Frank, which created a consumer right of data access, didn’t speak to the permissibility of data providers charging fees one way or the other.

When the CFPB formulated the bulk of its rule implementing this right during then-Director Chopra’s tenure, it sought to prohibit banks from charging fees for data access.

The lawsuit filed by bank industry trade groups the same day the CFPB’s final rule was released, in October 2024, sought to challenge the rule’s prohibition on fees. Since then, the facts on the ground have shifted, with JPMorgan Chase pressuring aggregators like Plaid to pay for access to consumers’ data — and Plaid agreeing to do so.

The New York bill seeks to cast a wide net by defining what financial institutions would be required to share consumer and small business data broadly.

The bill would cover “banking organizations” in the state, defined in state law as “all banks, trust companies, private bankers, savings banks, safe deposit companies, savings and loan associations, credit unions and investment companies,” as well as “out-of-state banks” that serve New York residents, which state law defines to include out-of-state state-chartered and nationally chartered banks and federal savings associations.

For good measure, the bill also specifies that it would apply to “any person or entity acting as a custodian for financial assets” and “any other data provider regulated by the department that maintains a financial product or service for a resident” of New York.

The upshot is that the proposed New York bill’s legislative language seeks to cover as many categories of financial institutions and banks as possible, regardless of where the entity is based or chartered, if it is providing products and services to a New York resident.

Categories of data that covered financial institutions must make available include:

• transaction information, including amounts, dates, payment types, pending or authorized status, and payee or merchant names, for at least twenty-four months preceding the request;

• account balance information;

• information to initiate payment to or from a covered account, including account numbers;

• terms and conditions of the consumer or small business, financial product or service, including interest rates, credit limits, overdraft coverage, rewards, and fee schedules;

• upcoming bill information, including amounts and due dates; and

• account and identity verification information, including name, address, and contact information.

The Financial Technology Association, an industry trade group that has sought to defend the Chopra-era CFPB rule, was quick to applaud New York’s move.

FTA president and CEO Penny Lee commented on the New York bill in a press release, saying, “Americans have a foundational right to securely access and share their financial data with the apps and services of their choice – without paying a fee. Secure, fee-free data portability is the lynch pin not only of a flourishing financial ecosystem but also of future innovations that will benefit consumers.”

Still, New York’s effort is likely to face something of an uphill battle. First, it must wind its way through the legislative process and, if successful, be signed by the governor. Should the bill become law, it would almost certainly face legal challenges from financial services entities that would be covered under the measure.

Everything Else: Lineage Completes Recap, BlockFill Goes Bankrupt, Mastercard Buys BVNK

Last week, Lineage Financial Network, the bank holding company that owns Lineage Bank, announced that it has completed the sale of a majority stake to Recap Financial Ventures.

Recap Financial Ventures, which saw its application to become a bank holding company approved by the Fed last month, raised $30 million from local Tennessee investors, according to its press release, of which $15 million was used to purchase preferred stock in Lineage. The transaction provided an immediate capital infusion to the bank that has struggled in the wake of the collapse of its one-time banking-as-a-service partner, Synapse.

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OK, I’ll admit it, I am having a little spring conference FOMO. But the reduced travel schedule is definitely a positive for my physical and mental health! I’m also using the ‘extra’ time to attend more virtual events — if you’re in the financial crime space, recommend checking out this webinar on AI in AML that Castellum.AI is hosti…

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