By Ben Walsh | Friday, July 13 Welcome to the inaugural Barron’s Finance & Technology email. There’s no shortage of fintech news, and crypto news in particular practically bumps into you in the hallway. Every week, we will aim to sort through the useful and the useless in fintech news. We'd like to know what you think. Give us your feedback by replying to this email or by filling out a short survey. Worried About Crypto The U.S. Justice Department is investigating possible fraud and manipulation in bitcoin and other cryptocurrencies because, c’mon obviously. There are 130 FBI investigations into virtual currencies, which both sounds like a lot and feels like too little. Why too little? A Boston College study found that 56% of all companies that do initial coin offerings go bust within four months. Of course, fraud and failure are not always the same thing, but ICOs are collapsing at a rate that suggests something more than just risk-taking. “Returns have been declining over time, as start-ups have become savvier about pricing coin offerings and more have people jumped into ICO investing,” Bloomberg’s Olga Kharif notes. It’s hard to feel assured by the fact that more people are jumping into a market where half the issuers fail a few months, but here we are. If you want to track failed ICOs, there’s a site called Coinopsy, the existence of which seems like compelling anecdote for the riskiness of the coin-offering market. Some people, especially reporters, like to question big bank CEOs about cryptocurrencies and the like. Among those with questions is the Financial Industry Regulatory Authority, or Finra, which wants to know what banks are up to with cryptocurrencies. Specifically, Finra is seeking information about current or planned activities “related to digital assets, including digital assets that are non-securities.” Others have concerns. At the end of last month, “a deputy governor at the Bank of England has fired a new warning to banks and asset managers about the risks of investing in cryptocurrencies,” Financial News reported. “Crypto assets,” he warns, “appear vulnerable to fraud and manipulation, as well as risks associated with money-laundering and terrorist financing.” That sounds about right and probably helps explain why, for instance, Jamie Dimon of JPMorgan Chase gets exasperated with constantly being asked about bitcoin on the one hand, and the bank’s compliance with post-crisis risk reduction on the other. And it’s certainly fair for a bank regulator to worry that cryptocurrencies might get used for money laundering, terror financing, and a whole slew of illegal things. After all, being able to buy and sell things anonymously was a huge part of the initial promise of bitcoin. Now for some links:
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