Canadian public capital markets appear to be in the seasonal summer lull, which most industry participants expect to be more pronounced than usual this year. That said, Sophic Client GameSquare Esports (GSQ-CSE) announced a second acquisition in a few weeks, as management executes on a disciplined M&A strategy. Wealthsimple has introduced fractional shares to make buying and selling large stocks more accessible for new retail investors. The move comes amid a recent rise in retail investing on trading platforms during COVID-19, which has benefitted Wealthsimple. For investors looking to play the retail investing trend, Sophic Client, AnalytixInsight (ALY-TSXV, ATIXF-OTC) could be an interesting stock to watch in the fall. In the USA, there was a decent level of IPO activity this past week, combined with potentially large M&A. At the same time, numerous news items allude to regulatory risk for large cap tech, including the US President & White House sparring with Facebook over the misinformation on the platform.

Canadian Technology Capital Markets & Company News

GameSquare Esports (GSQ-CSE, Sophic Client) acquires Cut+Sew & Zoned, a gaming and lifestyle marketing agency, to its portfolio of profitable companies.

GameSquare Esports Inc., an international gaming and esports company, has announced that it has acquired Cut+Sew and Zoned, a privately held marketing agency operating in the sports and esports industries for a total consideration of up to $7.85 million paid in cash and shares. “Cut+Sew/Zoned operates at the intersection of gaming, sports, new media, and understands how to bring the cool factor to brands and client engagements,” said Justin Kenna, CEO of GameSquare. “Having worked with Cut+Sew/Zoned in the past, I know the high quality of their work and also management’s ability to profitably grow their business. Under GameSquare, I see tremendous potential for Cut+Sew/Zoned to accelerate their top line growth while generating healthy EBITDA margins of roughly 40%, based on past performance, adding to our portfolio of profitable companies. I expect that Cut+Sew/Zoned will be instrumental in helping to monetize Complexity Gaming’s incredible media assets, and their work in sports will be an incredible addition to the agency of record agreement that was recently signed with the Dallas Cowboys.” https://prn.to/3xOmtow

Overactive Media completes qualifying transaction.

OverActive Media Corp. is pleased to announce that it has completed its previously announced qualifying transaction. At the same time, OverActive also completed the conversion of approximately $23 million worth of previously issued subscription receipts, issued in connection with the previously announced brokered private placement led by TD Securities Inc., into OverActive common shares. https://bit.ly/36Dbd27

BBTV (BBTV-TSX) makes strategic investment and forms strategic partnership with social NFT platform Nifty’s Inc. to create new revenue streams for creators.

BBTV Holdings Inc., the leader in creator monetization, Monday July 12, announced its NFT Division has made an investment into Nifty’s, Inc., the first social NFT platform dedicated to bringing digital collectibles to mainstream audiences. https://bit.ly/3ifPu5N

CPP Investments Invests US$800 Million in Flipkart Group.

Canada Pension Plan Investment Board (CPP Investments) announced today that it has invested US$800 million in the Flipkart Group (Flipkart), one of India’s leading digital commerce companies. Flipkart has raised US$3.6 billion in the current funding round, led by CPP Investments, Walmart, GIC and Softbank. “One of the key investment themes for CPP Investments has been Asia’s domestic consumption. We believe India will be a leading source of global growth in the decades ahead, supported by positive demographics, a growing middle class and deepening Internet penetration,” said Agus Tandiono, Managing Director, Head of Fundamental Equities Asia, CPP Investments. “This investment in Flipkart builds on our program to provide long-term capital to industry leaders. We look forward to supporting Flipkart’s efforts in growing India’s e-commerce market.” https://bit.ly/3z5Zllu

Great Hill Partners acquires majority stake in Auvik Networks for $312 million.

United States-based private equity firm Great Hill Partners has acquired a majority stake in Auvik Networks as the Waterloo-based startup looks to develop its international go-to-market strategy. Auvik secured $312 million from Great Hill, which has also invested in the likes of Wayfair. Auvik CEO Marc Morin told BetaKit some of the startup’s older investors were bought out, though did not disclose the investors or the amount of secondary capital in the deal. https://bit.ly/3koWAYs

Swift Medical secures $44 million in Series B financing.

Wound care management startup Swift Medical has raised $43.9 million as it looks to increase its customer base in North America. The all-equity round was led by California-based Virgo Investment Group through one of its managed investment funds. DCVC (Data Collective), which led Swift’s Series A round, also participated in the latest round, alongside BDC Capital’s Women in Technology Venture Fund. Other participating investors include Claritas Capital, Chrysalis Ventures, Pender Ventures, and Export Development Canada. https://bit.ly/3z3Pw7F

Computer vision startup Algolux secures $23 million Series B round.

Montréal-based computer vision startup Algolux has raised $23 million in a Series B funding round co-led by Forte Ventures and Drive Capital. Algolux is using the all-equity capital in an aim to increase the market adoption of its optimization platform for autonomous vision as the global computer vision market is set to boom over the next five years. Algolux is an artificial intelligence (AI) software company that has developed smart camera technology for computer vision systems. Computer vision is a field of AI that trains computers to interpret and understand the visual world. It uses cameras and videos to help systems identify, classify, and react to objects. It is used in a variety of industries ranging from energy and utilities to manufacturing and automotive. https://bit.ly/2UPlfeb

Float secures $5 million seed round to make corporate credit cards less of a headache.

Toronto FinTech startup Float has secured $5 million to bring a Brex-like offering to the Canadian market. Formerly named Journal, Float is looking to solve a major pain point for Canadian businesses through a combination of no personal guarantee corporate cards and a spending management platform. The seed round consisted of $4 million in equity co-led by Susa Ventures and existing investor Golden Ventures. It also saw participation from Andrew Wilkinson’s Tiny Capital, Michael Litt-led Garage Capital and Global Founders Capital. Silicon Valley Bank provided $1 million in debt as part of the financing. https://bit.ly/3emVFUM

Happin raises $1.2 million to fuel growth of its hybrid event platform.

Toronto-based software startup Happin, which offers a platform for hybrid, virtual and in-person events, has secured $1.2 million USD in seed funding to accelerate its growth. The equity financing, which was Happin’s first round of funding to date, came from Manuel DaCosta, CEO of Toronto-based media and broadcasting company MDC Media Group. Happin’s goal is to help the live performance industry navigate the future of events, both during COVID-19 and post-pandemic. https://bit.ly/3ig5vZI

Wealthsimple rolls out fractional shares trading in Canada, US companies. 

Wealthsimple has introduced fractional shares to make buying and selling large stocks more accessible for new investors. The Toronto-based FinTech startup claims it is the only trading platform in Canada to offer fractional shares in Canadian and United States (US) companies. Wealthsimple said, the new investment option comes in response to customer demand and aims to give more Canadian investors the chance to buy and sell portions of some of the market’s most highly-valued stocks. It comes amid a recent rise in retail investing on trading platforms during COVID-19, which has benefitted Wealthsimple. https://bit.ly/3ifcbXP

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC): Bloomberg expands access to community solar project to 4,800 eligible employees.

Bloomberg expanded access to community solar projects managed by Common Energy to more than 4,800 of its employees based in New York City. Through Common Energy’s Clean Energy Benefit Program, Bloomberg employees based in the city can enroll to support new, local community solar projects. The New York City community solar projects will be owned and operated by UGE International, a global clean energy developer. Community solar projects generate clean energy that flows to the power grid, thereby decreasing the use of fossil fuels and lowering emissions in the community. Employees who enroll in the program benefit by receiving clean energy credits that reduce their electricity cost each month. There is no cost to Bloomberg or its employees. “By giving our employees the option to support community solar projects everyone wins,” said Beth Mazzeo, Chief Administrative Officer at Bloomberg. “We raise awareness for the benefits of renewable energy, support local solar projects, lower emissions and fossil fuel consumption overall and on top of that our employees can lower their electricity bill each month.” https://bit.ly/3xNmTeX

Global Markets: IPOs, Venture Capital, M&A

SoftBank’s second Vision Fund speeds up pace of investment.

The group has committed US$30 billion of its own capital to the second Vision Fund. SoftBank’s second Vision Fund poured about US$13 billion into more than 50 companies during the second quarter, according to two people briefed on the numbers, marking a sharp increase in the pace of its investments. During the first three months of the year, the fund invested less than US$2 billion in fewer than two dozen companies, according to public disclosures. Many of its latest investments had not yet been publicly announced, one of the people said. https://on.ft.com/3xFA8hz

Space company Momentus and SPAC fined by SEC for misleading investors.

The SEC has announced charges against the black-check firm Stable Road Acquisition Corp and Momentus, the space propulsion company it agreed to take public. The regulator said the two entities misled investors about the viability of Momentus’s technology and national securities risks surrounding its founder and former CEO, Mikhail Kokorich. The announcement will likely put a further dampening effect on the SPAC market, which was becoming a way for young startups with little to no revenue to raise cash from public investors. In February, The Information reported that Momentus was an example of this trend: it said it was on track to generate US$2 million in revenue last year and promised investors US$90 million in future revenue through contracts with SpaceX, NASA and Lockheed Martin, according to a Stable Road presentation. But in actuality, Momentus generated no revenue last year, according to securities filings. The SEC said Momentus misled investors by telling them its propulsion technology worked in space, when its only in-space test had failed. SEC Chair Gary Gensler said the situation “illustrates risks inherent to SPAC transactions, as those who stand to earn significant profits from a SPAC merger may conduct inadequate due diligence and mislead investors.” Already, SPAC dealmakers are fretting about a possible wave of litigation against them and the companies they’ve taken public. In the past, SEC officials have also suggested forward-looking projections in SPAC securities filings rest on shaky legal ground. All parties besides Kokorich settled the charges and agreed to pay more than US$8 million in fines. The Stable Road-Momentus merger can still go through, though the two entities agreed to give PIPE financers, who provide the crucial additional capital for SPAC deals, the right to exit the deal before shareholders vote on the deal. Stable Road’s stock soared to as high as US$27 in February but is now trading at less than half that price. https://bit.ly/36LbRe2

Paycor HCM sets IPO terms, to be valued at up to US$3.6 billion.

Paycor HCM has set terms of its initial public offering, as the Ohio-based human capital management software company looks to raise US$388.5 million. The company disclosed Monday that it will offer 18.5 million shares in the IPO, which is expected to price between US$18 and US$21 a share. With about 171.3 million shares outstanding expected the expected IPO pricing could value Paycor at up to US$3.60 billion. The stock is expected to list on the Nasdaq under the ticker symbol “PYCR.” https://on.mktw.net/3knVcp5

Outbrain sets IPO terms, to be valued at up to US$1.4 billion.

Outbrain Inc. has set terms for its initial public offering, as the profitable New York-based online content recommendation company could be valued at up to US$1.39 billion. The company is looking to raise up to US$208.0 million, as it is offering 8.0 million shares in the IPO, which is expected to price between US$24 and US$26 a share. Outbrain expects to have about 53.4 million shares outstanding after the IPO. The stock is expected to list on the Nasdaq under the ticker symbol “OB.” Citigroup, Jefferies, Barclays and Evercore ISI lead a group of seven underwriters.  https://on.mktw.net/3rfAedj

Kaltura resets IPO terms lower, to now be valued at up to US$1.36 billion. 

Kaltura Inc. has reset terms of its initial public offering lower, in which the New York-based provider of on-demand video products is now expected to be valued at up to US$1.36 billion. The company is now looking to raise up to US$165.0 million, as it is offering 15.0 million shares in the IPO, which is expected to price between US$9 and US$11 a share. When the company originally set IPO terms in March, the company said it was offering 17.4 million shares and selling stock holders would offer 6.1 million shares in the IPO, which was expected to price between US$14 and US$16 a share to value the company at up to US$1.97 billion. The company is expected to list on the Nasdaq under the ticker symbol “KLTR.” https://on.mktw.net/3xPHbUY

Couchbase to offer 7 million shares in IPO priced at US$20 to US$23 each. 

Couchbase Inc. , a provider of a database for enterprise applications, set terms for its initial public offering on Monday, with plans to offer 7 million shares, priced at US$20 to US$23 each. The company has applied to list on Nasdaq, under the ticker ‘BASE.’ https://on.mktw.net/3rexxZo

Robinhood, others upend rules for early IPO trading.

When Robinhood shares start trading at the end of this month, employees will be able to sell 15% of their holdings immediately, rather than after the traditional six-month lockup period, according to a regulatory filing. Three months later, they can sell another 15%. https://on.wsj.com/3wMyXvj

Indian digital payments giant Paytm files for US$2.2 billion IPO. 

Digital payments giant Paytm, one of India’s most valuable startups, plans to raise up to US$2.2 billion in an initial public offering, it said in draft papers submitted to the country’s market regulator on Friday. The Noida-headquartered firm backed by Alibaba (which, alongside Ant Financial, owns 36% of Paytm), Berkshire Hathaway, and SoftBank (owns about 18% stake) among others said it will issue new shares worth US$1.1 billion and offer sale worth of US$1.1 billion. https://tcrn.ch/3xOFx6a

ByteDance shelved IPO intentions after Chinese regulators warned about data security.

ByteDance Ltd., the Chinese owner of popular short-video app TikTok, put on hold indefinitely its intentions to list offshore earlier this year after government officials told the company to focus on addressing data-security risks, people familiar with the matter said. The Beijing-based social-media giant, last valued at US$180 billion in a funding round in December, had been weighing an initial public offering of all or some of its businesses in the U.S. or Hong Kong, according to people familiar with the company’s plans. https://on.wsj.com/3rcC0Mi

Intel Is in talks to buy GlobalFoundries for about US$30 billion. 

Intel Corp. is exploring a deal to buy GlobalFoundries Inc., according to people familiar with the matter, in a move that would turbocharge the semiconductor giant’s plans to make more chips for other tech companies and rate as its largest acquisition ever. A deal could value GlobalFoundries at around US$30 billion, the people said. It isn’t guaranteed one will come together, and GlobalFoundries could proceed with a planned initial public offering. GlobalFoundries is owned by Mubadala Investment Co., an investment arm of the Abu Dhabi government, but based in the U.S. https://on.wsj.com/3wHqI3L

Microsoft agrees to acquire cybersecurity company RiskIQ.

Microsoft Corp. said it has agreed to acquire RiskIQ, a security software maker, as the tech giant tries to expand its products and better protect customers amid a rising tide of global cyberattacks. The company announced the deal Monday on its web site and didn’t disclose terms. Bloomberg on Sunday reported the purchase, citing people familiar with the matter. Microsoft is paying more than US$500 million in cash for the company, said one of the people, who declined to be named discussing confidential matters. https://bloom.bg/3iiIlSz

Apple asks suppliers to build 90 million ‘iPhone 13’ units by the end of 2021. 

Almost two months ahead of the announcement, Apple is asking its suppliers to speed up production of the next-generation iPhone. The company expects to ship 90 million units of the so-called “iPhone 13” by the end of this year, according to a new report from Bloomberg. As mentioned by the report, citing sources familiar with the matter, Apple usually orders about 75 million units of a new iPhone for its launch period, which usually runs from September-October to the end of the year. This year, however, the company wants to increase its production by 20%. The main reason for ordering more iPhone units is that the company probably believes that this year’s phones will have stronger sales as the COVID-19 vaccination progresses around the world. This will also be the second iPhone update with support for 5G networks, which may push even more people to upgrade. https://bit.ly/3xLv1fS

GameStop shares slide 6% premarket Thursday after Netflix makes first videogame hire signaling potential shakeup of sector. 

GameStop Corp. shares slid about 6% in premarket trade Thursday, after Netflix Inc. announced its first major videogame hire, potentially signaling a move beyond its streaming-video roots. The streaming giant hired Mike Verdu as vice president of game development, poaching him from Facebook Inc. , where as vice president of content for Reality Labs, he oversaw Oculus Studios as well as the teams bringing second- and third-party virtual-reality games and other apps to Oculus virtual-reality headsets. https://on.mktw.net/2UbRp3A

Media, Streaming, Gaming & Sports Betting

Netflix plans to offer video games in push beyond films, TV.

Netflix, marking its first big move beyond TV shows and films, is planning an expansion into video games and has hired a former Electronic Arts and Facebook executive to lead the effort. Mike Verdu will join Netflix as vice president of game development, reporting to Chief Operating Officer Greg Peters, the company said on Wednesday. Verdu was previously Facebook’s vice president in charge of working with developers to bring games and other content to Oculus virtual-reality headsets. https://bit.ly/3B1ezdv

Twitch streamers rake in millions with a shady crypto gambling boom. 

Twitch is in the middle of a gambling boom, fueled by the rise of so-called “crypto casinos”—websites where gamblers can purchase cryptocurrencies like Bitcoin and Ethereum for use in digital games of chance like slots, blackjack, and baccarat.  And sites like Stake and Roobet are paying popular streamers to play the casino games on their channels, sometimes offering tens of thousands of dollars an hour, according to streamers and experts interviewed by WIRED. One gambling website, Duelbits, apparently offered top gambling streamer Adin Ross between US$1.4 million and US$1.6 million a month to stream slots on Twitch, according to a Discord DM between himself and Duelbits. (Ross, who was recently suspended from Twitch for using his phone while driving, did not respond to WIRED’s requests for comment. Neither did Stake, Roobet, or Duelbits.) https://bit.ly/3icceDQ

TikTok is the first non-Facebook mobile app to surpass 3 billion downloads globally.

ByteDance’s TikTok is a huge success. One of the most downloaded apps through the quarantine times, the video app has now surpassed 3 billion downloads globally, according to a Sensor Tower study. TikTok is the first non-Facebook app to achieve this mark. Despite threats of government bans and after being removed from India, its biggest market, TikTok’s popularity in the rest of the world has continued growing. https://bit.ly/3Bbp11R

Apple cautious about proposal for streaming music services to pay artists 50%.

Apple has expressed caution about a proposal to increase the share of streaming music revenue paid to artists from the current typical 16% to a far higher 50% rate. The British government has proposed a “complete reset” of the business model for streaming music, so that artists and songwriters are better compensated. https://bit.ly/3rbud1m

Marvel’s ‘Black Widow’ debuts with dazzling US$80 million in theaters, US$60 million on Disney Plus.

Disney and Marvel’s superhero adventure “Black Widow” captured a massive US$80 million in its first weekend, crushing the benchmark for the biggest box office debut since the pandemic. The film, starring Scarlett Johansson, is the first from the Marvel Cinematic Universe to open simultaneously in movie theaters and on Disney Plus, where subscribers can rent “Black Widow” for an extra US$30. Disney reported that “Black Widow” generated more than US$60 million “in Disney Plus Premier Access consumer spend globally,” marking the rare occasion in which a studio disclosed the profits made from streaming. https://bit.ly/3wJQYKX

Adtech, Privacy & Regulatory

Biden says Facebook is ‘killing people’ with Covid misinformation.

President Joe Biden said Facebook and other social media platforms are “killing people” with misinformation about Covid-19, as the government ups its pressure on Big Tech over the spread of damaging false narratives. Biden made the comments Friday after he was approached by a reporter who asked him what his message was to platforms like Facebook on the topic of Covid misinformation. “They’re killing people,” Biden said. “I mean they’re really, look, the only pandemic we have is among the unvaccinated — and they’re killing people.” A spokesperson for Facebook said in a statement that the company would “not be distracted by accusations which aren’t supported by facts,” adding that “more than 2 billion people have viewed authoritative information about Covid-19 and vaccines on Facebook, which is more than any other place on the internet.” The federal government has been critical Facebook and other social platforms amid its vaccine drive, as false narratives about the virus and the safety of vaccines continue to spread online. White House press secretary Jen Psaki told reporters Thursday that the government has been flagging problematic posts for Facebook. “They’re a private sector company. They’re going to make decisions about additional steps they can take,” Psaki said. “It’s clear there are more that can be taken.” https://bit.ly/3igDUHI

Google slapped with US$590 million fine over news dispute in France.

France has fined Google more than US$590 million for failing to comply with orders to negotiate paid agreements with news publishers, as regulators continue to tighten the screws on tech giants around how they pay for news that appears on their platforms. The country’s competition regulator announced the massive fine for Google on Tuesday morning, accusing the search giant of not complying with court orders to negotiate the deals with firms for the news that appears in search results. Google said it was “very disappointed” by the regulator’s decision and that it was on the verge of reaching agreement with some publishers. It has already struck deals with some of the biggest outlets in France, including Le Monde and Le Figaro. But to avoid future fines, Google will now need to speed up negotiations – the regulator threatened to fine the company US$1 million per day if proposals aren’t in place in the next two months. https://bit.ly/2Thr17M

 Google to fight EU antitrust fine at court hearing from Sept. 27 – sources.

 Alphabet unit Google will seek to overturn a record 4.34-billion-euro (US$5.15 billion) EU antitrust fine at a five-day hearing in September at Europe’s second-highest court, people familiar with the matter said. The European Commission in its 2018 decision said Google had used its popular Android mobile operating system to thwart rivals, an anti-competitive practice dating from 2011. Android, used by device makers for free, is found on about 80% of the world’s smartphones. The case is the most important of the EU’s three cases against Google because of Android’s market power. Google has racked up more than 8 billion euros in EU antitrust fines in the last decade. The hearing will kick off on Sept. 27, the people said. Google did not immediately respond to a request for comment. https://reut.rs/2VGnvEK

Facebook and its advertisers are ‘panicking’ as the majority of iPhone users opt out of tracking.

With iOS 14.5 released to the public earlier this year, iPhone and iPad users now have the ability to easily opt out of cross-site and cross-app tracking and targeting. New data from analytics firm Branch indicates that just 25% of users are opting in to tracking, which is causing panic in the advertising industry. As detailed in a new report from Bloomberg, the impact is being felt in particular by Facebook advertisers. Facebook is reportedly no longer able to provide certain metrics to advertisers to help them know whether their ads are working. https://bit.ly/3ifc3Yl

Biden’s executive order links data collection to competition.

President Joe Biden‘s push for Federal Trade Commission rules protecting consumer data privacy highlights ties between tech companies’ power and the personal information they collect. Biden urged the FTC to write rules governing “the surveillance of users” in a wide-reaching executive order on competition, singling out unfair data collection practices that could damage competition and consumer privacy. https://bit.ly/36ulcqv

Researchers find big flaw in a Schneider Electric ICS system popular in building systems, utilities.

A vulnerability in Schneider Electric computer control systems popular in heating, air conditioning and other building systems could allow hackers to take control of them, researchers at security firm Armis warn. The remote code execution vulnerability puts millions of devices at risk, Armis said in a report out Tuesday. The affected Modicon programmable logic controllers (PLCs) are also used widely in manufacturing, automation applications and energy utilities. The vulnerability could be used to deploy a variety of attacks, from launching ransomware to altering the commands to machinery. https://bit.ly/3kqoOC4

EU delays push for digital levy to focus on global tax deal.

The European Union said Monday that it would postpone its push for a controversial digital levy to focus on a negotiation over a broader minimum global tax deal struck by the world’s largest economies. The U.S. has lobbied against the levy on digital sales that was likely to hit Silicon Valley giants’ business in Europe. The EU had pledged to introduce a levy if there was no progress on a more sweeping effort to tax corporations more uniformly. Such a pact now seems more likely after the Group of 20 endorsed the principles of a global-tax agreement. https://bloom.bg/3z3aseV

Fintech, Blockchain & Cryptocurrency

Facebook pay available off Facebook.

The cozy and consolidated universe of payment and digital wallet providers got a little less comfortable on Wednesday (July 14) after social media giant Facebook announced that its Facebook Pay service will, for the first time, be available off of its own platform, starting with Shopify vendors in August. The announcement marks the latest move by the California-based social media giant that will tighten up the competition within the lucrative payments sector. https://bit.ly/36Io1Eu

Apple will launch its own ‘buy now, pay later’ scheme with Goldman Sachs, a report says.

Apple is teaming up with Goldman Sachs to launch its own “buy now, pay later” service, according to a Bloomberg report published Tuesday. “Apple Pay Later” will be available on Apple devices via the Wallet app, allowing customers to buy products and split the payment over multiple months, people with knowledge of the matter told Bloomberg. They did not say when it was expected to launch. The service, which will rival the likes of Affirm and Klarna, will be available to use in retail stores or when buying online, the sources told Bloomberg. https://bit.ly/3hFpB0i

India bans Mastercard from adding new customers.

Reserve Bank of India has indefinitely barred Mastercard from issuing new debit, credit or prepaid cards to customers in the South Asian market over noncompliance with local data storage rules. The South Asian market’s central bank said the new restrictions will go into effect on July 22. Notwithstanding lapse of considerable time and adequate opportunities being given, the entity has been found to be noncompliant with the directions on Storage of Payment System Data,” RBI said in a statement Wednesday. https://tcrn.ch/3wJo0Lf

Fed Chair Jerome Powell says cryptocurrencies and stablecoins won’t be needed once the US has a digital currency.

Federal Reserve Chairman Jerome Powell on Wednesday challenged the need for cryptocurrencies if it were to issue its own central bank digital currency. “You wouldn’t need stablecoins, you wouldn’t need cryptocurrencies, if you had a digital US currency,” the Fed chief said. “I think that’s one of the stronger arguments in its favor.” Stablecoins are a type of cryptocurrency pegged to an asset such as a fiat currency or a precious metal. “We have a tradition in this country where the public’s money is held in what is supposed to be a very safe asset,” Powell said. “That doesn’t exist for stablecoins, and if they’re going to be a significant part of the payments universe…then we need an appropriate framework, which frankly we don’t have.” https://bit.ly/3xMFmrM

Crypto trading volume fell 43% in June following China’s crackdown on the sector.

Lower prices and volatility sent cryptocurrency trading volumes sliding 42.7% in June as China booted miners out of the country and cracked down on crypto use broadly, according to a report from CryptoCompare. The analytics firm found that trading volumes plunged to US$2.7 trillion in a broad-based slowdown that hit all major crypto exchanges. The highest daily volume in June was down 42.3% from the equivalent peak in May. https://bit.ly/3z7LF9w

Hong Kong police bust a crypto money-laundering scheme worth US$155 million.

Hong Kong authorities arrested four men for a suspected money-laundering syndicate involving HK$1.2 billion (US$155 million) with virtual currency. Operation “Coin Breaker” was launched on July 8, and the men aged between 24 and 33 have been arrested, according to a statement from Hong Kong Customs. The men opened various local bank accounts and made transactions through a virtual currency exchange trading platform, the statement said. The suspicious funds were processed via bank remittances and virtual currency from February 2020 through this May, according to officials. https://bit.ly/3xMptld

Jack Dorsey’s Square is building a bitcoin-inspired financial services business.

Square is building a new business to help bitcoin developers build financial services products, CEO Jack Dorsey said Thursday. Dorsey, who is also CEO of Twitter, said that the new business was called TBD, although he didn’t clarify whether this meant he was still thinking of a name. Square executives said in June that the company was planning to build a hardware cryptocurrency wallet and software service with the intent of making bitcoin “more mainstream.” https://bit.ly/2VK5kxX

PayPal increases weekly cryptocurrency purchase limit fivefold to US$100,000. 

PayPal is upping the amount of cryptocurrency users can purchase by five times. PayPal’s users can now buy US$100,000 worth of bitcoin and other digital assets per week, up from a previous limit of US$20,000. The company is also scrapping its annual purchase limit of US$50,000. “These changes will enable our customers to have more choice and flexibility in purchasing cryptocurrency on our platform,” Jose Fernandez da Ponte, PayPal’s vice president and of blockchain, crypto and digital currencies said in a statement Thursday. https://cnb.cx/3z32vXg

Semiconductors

China’s semiconductor output hits record high as Beijing boosts local production amid intensifying US-China tech war. 

China’s output of integrated circuits (IC) reached an all-time, single-month high in June as the country spares no effort to produce chips amid a severe global shortage of semiconductors, according to data released by the central government on Thursday. China’s IC output reached 30.8 billion units, surging 43.9% from the same month a year ago and beating the previous record of 29.9 billion units in May, according to data from the National Bureau of Statistics. The numbers mark the first time China has produced an average of 1 billion semiconductor units per day in a single month. https://bit.ly/2VOtl7g

TSMC expects auto-chip shortage to abate this quarter. 

Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker, said it expects the chip shortage that has hampered car makers to start easing in the next few months after it ramped up its production of auto chips. The company is on track to increase output of microcontrollers used in cars by about 60% this year compared with last, Chief Executive C.C. Wei said in an earnings call on Thursday. However, he said, the broader semiconductor shortage could persist until 2022. A dearth of semiconductors, used in products including home appliances and smartphones, has stymied manufacturing activity, notably in the auto industry. That shortfall should be greatly reduced for TSMC customers in the current quarter, Mr. Wei said. https://on.wsj.com/3wLVWa7

ESG

LG Chem will invest US$5.2 billion in battery materials through 2025.

South Korea’s LG Chem has earmarked ₩6 trillion (US$5.2 billion) over the next four years to build out its battery materials business. The investment comes as automakers and state regulators set targets to transition away from internal combustion engine vehicles, in a shift that will likely be the most transformative to the mobility industry since the invention of the car. https://tcrn.ch/3Bb1Ncj

Apple reportedly wants batteries for the Apple Car to be produced in the US.

Project Titan has gone through many phases since its introduction into the rumor mill in 2015. For a while, Apple had focused on autonomous driving technology rather than hardware. Although the actual car is still several years away, most publications now believe that Apple is once again aiming to ship an actual electric vehicle. Digitimes today has a report on the battery supply chain. Recent hiring news continue to show Apple’s push to make an actual vehicle. Last month, Bloomberg reported Apple has hired a long-term employee from BMW who led development of the BMW i3 electric vehicle. Apple also brought onboard Porsche’s Vice President of chassis development earlier in the year. Digitimes says Apple is insistent that battery packs for its electric vehicle will be produced inside the United States. https://bit.ly/3hGJqV1

Sophic Capital Client Insights

Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC): It’s been just over 2 months since Thomas Rosander became the new CEO of esports betting company Real Luck Group. Join Mr. Rosander for a webinar business update on Thursday, July 22 at 12pm EDT/ 9am PDT. https://bit.ly/3r9ZGkj

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