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Home Weekly Highlights The Best of Tech News: February 8th-14th

The Best of Tech News: February 8th-14th

The second week of February has been the busiest in tech news since the beginning of 2021! This is our most extensive news review yet, however, there is a lot to report. Last week, the tech industry had several debates and urgent calls regarding tech regulations. In the United States, the Securities and Exchange Commission is calling for a cryptocurrency regulatory framework that is needed as soon as possible. In Canada, the main security regulator cleared the launch of the first bitcoin ETF. Meanwhile, in Europe, the EU privacy agency wants to add stricter regulatory rules to curb the U.S big tech excess. Apart from the regulatory tech news, what has been happening in the tech news in the second week of February 2021? The biggest global tech companies have been announcing their stand on bitcoin and investing in cryptocurrency after Tesla decided to invest $1,5 billion in bitcoin, sending the cryptocurrency soaring up. We also talk about Huawei trying to appeal to Trump’s latest moves, Facebook joining the smartwatch market, and some interesting fintech and biotech IPOs. Lean back and enjoy your best of tech news highlights, featuring the second week of February in 2021.

SEC: Transparent Crypto Regulatory Framework Urgently Needed

One of the top Securities and Exchange Commission (SEC) official has said that a clear and transparent regulatory framework regarding cryptocurrencies is urgently needed. The statement comes following the long week of announcements that major companies such as Tesla Inc, Mastercard, BNY Mellon, or Uber made about embracing cryptocurrency in a broader scope. 

In an interview with Reuters, Hester Peirce, a commissioner at SEC has supported the need for more regulations regarding cryptocurrencies. 

“It’s not only that there have been calls for clarity for some time and that a new administration brings the chance to take a fresh look, but it also is a moment where it seems others in the marketplace are also taking a fresh look,” she said.”

Peirce has been enthusiastic about cryptocurrency for a long time and she has even been nicknamed “Crypto Mom” by other crypto supporters. She has also been a long time advocate for regulators to increase the rules surrounding crypto. That way, the alternative assets can thrive without the risk of going against the law. 

After it was announced that the electric car-make pioneer led by Elon Musk, Tesla, invested $1.5 billion in bitcoin, a variety of other companies came out with statements on how they plan to embrace the cryptocurrencies in the near future. That has driven the prices of bitcoin to a new all-time high, almost reaching $50 000. 

“That adds to the urgency of us taking some sort of action in this area to provide more clarity,” said Peirce.

Huawei Suppliers Appeal Latest Trump Administration Moves

The semiconductor firms are appealing the last-minute moves of the Trump administration, blocking sales to the Chinese telecom giant. The companies are hoping that the course of action will be reversed under the Biden administration.

The companies hope that if they are allowed to make their case before an interagency panel and if the policies shit in their favor, at least a part of the Huawei sales will be allowed, as reported by Reuters.

One of the last decisions of the former President, Donal Trump, before leaving the office on January 20th was revoking some licenses for the Huawei suppliers such as Intel Crop to sell to Huawei and other Chinese telecoms.

“I don’t think you will see a change in policy on Huawei,” said James Lewis of the security think tank CSIS. “I think (the Biden administration) is mainly signaling, ‘We are going to do the same thing, but try to do it in a more business-friendly way.’”

Telecom Tech News For IoT Fans: Facebooks About To Join The SmartWatch Market

All the enthusiasts of IoT applied in MedTech will be extremely excited about Facebook’s latest announcement. The tech giant is building a smartwatch with health features. The current smartwatch market is dominated by Apple Inc and Huawei. However, the report claims that Facebook plans to start selling its device already next year and become a competitive force in the current market.

Currently, we don’t have much information about how the watch will be operating. However, we know that it will work through a cellular connection and let the users send messages through Facebook’s services. It will also connect to the services of health and fitness companies such as Peloton Interactive. This can be one of the biggest selling points of the Facebook watch. There has been a growing demand for health-related smart devices and wearables.

The information initially reported on Friday and repeated by Reuters allegedly comes from people who have direct knowledge of the device. Facebook did not immediately respond to Reuters’ request for comment.

Robinhood CEO Admits Admits Communication Errors Before The House Testimony

The CEO of the trading app, Robinhood, admitted that the company was not transparent enough with its customers regarding the restrictions concerning the heavily shorted stocks caused by the so-called “Reddit rally”.

“No doubt we could have communicated this a little bit better to customers,” CEO Vlad Tenev said late Friday in a podcast. “We probably could have offered more detail into that with the foresight that maybe customers would think that a hedge fund forced us to do it,” he added.

Tech News Of February: Robinhood Restricting The Heavily Shorted Stocks

Tenev’s announcements are a few days ahead of the U.S House Financial Services Committee hearing. The 18 February hearing will concern the role that Robinhood had in the trading turmoil. Apart from Vlad Tenev, the CEOs of Citadel Securities, Melvin Capital, and Reddit will participate in the hearing as well. On the 28th of January, Robinhood has restricted buying of several of the heavily shorted stocks including Gamestop. The record-high prices of the companies whose shares have jumped up even by 1,600% (in the case of GameStop) made them hugely demanded. Thus, it does not come as a surprise that Robinhood’s restrictions have infuriated many of its followers. 

Tenev has explained that the company did not have any choice as to whether to impose the restrictions. As the huge increase in deposit requirements by a post-trade regulator occurred, Robinhood had no choice but to impose the restrictions. However, this was not specified in the email that the company sent to its customers. 

“As soon as those emails went out, the conspiracy theories started coming, so my phone was blowing up with, ‘how could you do this, how could you be on the side of the hedge funds,’” he said.

Regulatory News: Canadian Regulator Clears Launch Of The First Bitcoin ETF

Big cryptocurrency news came from Canada on Friday. The main securities regulator, The Ontario Securities Commission, cleared the launch of the world’s first bitcoin exchange-traded fund, Purpose Bitcoin ETF, according to the Toronto-based asset management company, Purpose Investments Inc. 

“The ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency,” Purpose Investments said.

What can investors gain from an ETF like Purpose Bitcoin? They can for example buy at net asset value and not at a premium. 

“I think the OSC is doing the right thing allowing for an ETF,” Salzer said. “It gets rid of some of the negatives of the current funds.”

Many are questioning whether the launch of the Canadian ETF will set the stage for a U.S ETF. Since 2013, eight firms have already tried such operations in the United States. However, none of them have succeeded. 

Todd Rosenbluth, director of ETF and mutual fund research at a New York-based CFRA said, “While some expect that a Canadian ETF approval sets the stage for a near-term U.S. one, we expect the SEC under new leadership to take their time to review some of the new filings from VanEck and others,”

The FinTech Startup News: MoneyLion About To Go Public Via A Mega-Merger

On Friday, the mobile banking fintech, MoneyLion, said that it has agreed to go public. The IPO will happen via a merger with a bank-check Fusion Acquisition Corp. The deal will bring the value of the merged companies at the hooping $2.9 billion. 

The merger will be supported by private investment from funds managed by BlackRock and others. The private investment value is approximately $250 million. 

MoneyLion, founded in 2013 in New York, uses machine learning to give its customers access to small loans. They also offer a wide range of financial advisory and investment services that are easily accessible in the mobile app. 

The company is led by a Wall Street executive, Diwakar Choubey. Choubey has long-time expertise from holding senior positions at companies such as Goldman Sachs Group Inc, Citadel, and Barclays PLC. 

A merger such as the one between MoneyLion and Fusion become increasingly popular. Their undoubted advantage is more stability when it comes to valuation and the possibility to bypass the scrutiny that comes with an IPO. Thus, a lot of companies looking to go public choose a merger with a special purpose acquisition companies like Fusion. 

Companies Announce Their Stand On Cryptocurrencies

After Tesla announced that they invested $1.5 billion in bitcoin and plan to start accepting crypto as a payment method, a series of companies came out and added to the discussion by revealing their own plans regarding the adaption of crypto. 

PayPal’s Chief Financial Officer, John Rainey, said in the CNBC interview last week that the company is unlikely to invest cash in cryptocurrencies.

“We’re not going to invest corporate cash, probably, in sort of financial assets like that, but we want to capitalize on this growth opportunity that’s in front of us,” Rainey said. 

Back in October, PayPal said that it will let the U.S customers hold cryptocurrencies in the online wallets. However, as Rainey said, when it comes to its own investment, PayPal is focused on the services it is providing such as the buy now, pay later. 

Following Tesla’s revelation, Twitter Inc said it may hold bitcoin but it is still not decided. Similarly, General Motors said that it is currently evaluated whether bitcoin will be accepted as a payment method. However, neither of the companies gave any substantial statements on how they plan to proceed with adapting (or not adapting) cryptocurrency into their operations. 

Similarly, the CEO of UBER, Dara Khosrowshahi, said on Thursday that the ride-hailing giant will not invest in bitcoin but is evaluating whether to accept the cryptocurrency as a payment method.

“We’re going to keep our cash safe. We’re not in the speculation business,” Khosrowshahi said. “Just like we accept all kinds of local currencies we are going to look at cryptocurrency and/or bitcoin in terms of a currency to transact. If there’s there a benefit there if there’s a need we’re going to do it.”

Regulatory Tech News From The EU: Privacy Agency Wants More Safeguards To Curb U.S Big Tech Excess

On Wednesday, the EU’s privacy watchdog EDPS announced a series of new suggested safeguards and strict rules that will curb the power of Apple, Amazon, Google, and Facebook.

As Reuters reports, the two pieces of legislation that were announced by the EU Competition Commissioner Margrethe Vestager and EU industry chief Thierry Breton in December last year are Digital Markets Act (DMA) and the Digital Services Act (DSA).

“The EDPS welcomes the (DMA) proposal, as it seeks to promote fair and open markets and the fair processing of personal data,” the EU watchdog whose role is to ensure that the EU institutions comply with the privacy rules set out by the bloc, said.  

The EDPS has commented on the DMA and DSA both and added a series of suggestions that can furtherly control the big techs. However, before the rules become law, they have to be discussed with each member state and the EU lawmakers. The process will take between 16 and 24 months. 

BioTech News: Lackluster Public Debut Of The Hearing-Loss Biotech, Decibel

In its official public offering on Friday, the Boston based biotech, Decibel Therapeutics raised $127 million. However, its opening day of trading was not nearly as exciting with the stock price closing virtually flat, as reported by the Boston Globe. 

Decibel is a hearing loss biotech startup that develops gene therapies for hearing and balance disorders. The biotech company works on revolutionary therapies for hearing loss.  At first, the company filed for selling 5.9 million shares but ended up with a surprise increase, offering 7.1 million shares at $18. 

Its first trading day closed with an $18.03, just a three-cent increase for the biotech company listed under the DBTX symbol. 

Despite the pandemic, or one should maybe say because of the pandemic, the interest in biotech has been continuous. The biotech sector recorded more than 100 IPOs, doubling its 2019 number. 

Decibel is led by Laurence Reid since January 2020. Reid is a long-term biotech expert, coming to Decibel after serving as the chief executive of the Cambridge biotech, Warp Drive Bio. He is also an active entrepreneur at Third Rock Ventures, the VC firm that stands behind several life sciences firms.  

Come back next week for another weekly tech news highlights! Meanwhile, do not waste your February procrastinating, make sure you take a look at our event calendar and look at the best FREE events that you can attend virtually this month. We will be back next Monday with another February tech news weekly highlights

Remember to check out last week’s latest tech news.

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