Latest banking news, Feb. 3, 2023

Villone returns to Barclays after five-year Marcus stint

Barclays' U.S. consumer bank has named Doug Villone head of its U.S. cards and partnerships business. Villone, who worked at Barclays from 2007 to 2018, will return to the British bank's U.S. arm after a five-year stint at Goldman Sachs. He had joined Goldman in the early days of its efforts to expand into the U.S. consumer business, an initiative that has since been scaled back. Villone was global head of operations at Goldman's Marcus consumer platform, where he played a critical role in its expansion into credit cards, personal loans, investments and savings, Barclays said in the hiring announcement. Villone will start in April and succeed Bob Highland, who is retiring from Barclays after 15 years. — Polo Rocha

Mastercard NFT exec quits via NFT

Andrew Harrer/Bloomberg

One of the executives leading Mastercard's foray into nonfungible tokens has left the company, leaving a digital mark as notification. Satvik Sethi, nonfungible token lead at Mastercard, this week announced his resignation using a Twitter thread. He also minted his resignation letter as an NFT. In the letter Sethi said working for Mastercard over the past year has been an "incredible learning experience" and he was grateful. He added his experiences at Mastercard made him more passionate about Web 3.0. He also claimed his compensation was lowered when relocating to London and it had become "a real struggle" to sustain himself. On Twitter, he claimed there were months he didn't receive his salary until "I begged across the hierarchy for it." Mastercard and other financial institutions including American Express, Visa and Ripple have been scoping out potential uses for NFTs, which are a digital representation of an individual, group or organization's art. Most of the early uses for NFTs at payment companies have been as part of incentive marketing or philanthropic giving. "We are aware of the concerns raised by Mr. Sethi. We take them very seriously and they will be looked into. We will do so with the continued respect for his privacy and will not have a further comment at this time," Mastercard's press office said in an email. — John Adams

Credit Union of Colorado promotes COO to president

Phil Smith.

Credit Union of Colorado in Denver named Phil Smith its next president. Smith has been with the $2.3 billion-asset credit union since 2010, and was most recently its chief operating officer. "Every day our team endeavors to actively support our members and the communities we serve," Smith said in a press release. "I'm dedicated to the implementation of strategic, financially prudent and innovative solutions — providing the best staff and member experiences while positioning the credit union for continued growth and expansion." The credit union did not say who will take over as COO. — Frank Gargano

Bankrupt crypto firm Celsius says some users can withdraw assets

Cryptocurrency Kiosks Amid Bitcoin, Ether Record Rally

Bloomberg News

Some users of the bankrupt crypto lender Celsius Network's Custody program will be able to withdraw 94% of their eligible assets, according to a court filing. The fate of the remaining 6% will be decided by the court at a later date, Kirkland & Ellis said on behalf of Celsius in the filing Tuesday. The more than 1,400-page document listed the names of eligible customers. Celsius said on Twitter that users need sufficient assets in their accounts to satisfy withdrawal fees. Celsius filed for bankruptcy in July after a sharp decline in crypto prices caused risky bets to backfire. The firm is one of a number of digital-asset lenders that hit the buffers in last year's market rout. A court-appointed examiner this week blasted Celsius and its former CEO Alex Mashinsky for lacking adequate risk management and misleading customers about its business practices and financial health. The company is the target of investigations by U.S. state and federal regulators. — Joanna Ossinger, Bloomberg News

FTX bankruptcy filing lists $1.4 billion cash, lower headcount

Andrey Rudakov/Bloomberg

The bankrupt FTX group of crypto companies held $1.43 billion in cash at the end of last year and saw headcount drop almost 40%, according to an interim financial update. The cash balance at Dec. 31, 2022, was higher than a $1.24 billion tally as of Nov. 20, the court filing showed. The latest figure for one of the entities, defunct trading house Alameda Research, was $876.6 million versus $401 million in November. Meanwhile, the number of group employees dropped to 195 by year-end from 320 when FTX slid into bankruptcy on Nov. 11. The U.S. has accused the discredited former crypto mogul Sam Bankman-Fried of presiding over one of the biggest frauds at the helm of the fallen FTX exchange. He faces trial after pleading not guilty to criminal charges. Administrators are sifting through the wreckage in an effort to see how much can be returned to creditors. — Suvashree Ghosh, Bloomberg News

Deutsche Bank leans on lending units as investment bank sputters

Deutsche Bank signage sits on the side of a branch in Hamburg, Germany.

Krisztian Bocsi/Bloomberg

In the final quarter of Deutsche Banks four-year turnaround, the businesses that were supposed to be the centerpiece of Christian Sewing's overhaul are finally coming into their own. Combined pretax profit at the corporate and retail units soared more than sevenfold from a year earlier. That helped drive annual profit to the highest in 15 years, even as the investment bank that fueled Deutsche Bank's growth for most of the past years saw earnings slump by two- thirds. CEO Sewing has said he wants the corporate and private bank to take over as growth engines for the coming years, as Europe finally emerges from its long experiment with negative interest rates. The fourth quarter suggests that great rotation is well on its way. The sudden increase in central bank interest rates has allowed lenders to charge more for loans while they take time to pass on the benefits to savers. Chief Financial Officer James von Moltke cautioned, however, that this effect will eventually fade when banks lift deposit rates. — Steven Arons, Bloomberg News

Kraken shuts Abu Dhabi office as crypto exchanges keep shrinking

The crypto exchange Kraken has shut its Abu Dhabi office less than a year after winning a local license, part of a retrenchment that involves cutting almost a third of its global workforce. Kraken laid off the majority of its team focused on the Middle East and North Africa, affecting about eight roles, a spokesperson said. A registry for Abu Dhabi Global Market, where Kraken received a crypto license last April, no longer shows an active entity in the company's name. The exchange has suspended support for transactions in the United Arab Emirates's currency, but clients in the region will still be able to use other products and services. That doesn't require a local license, the spokesperson said. Turmoil in crypto markets last year prompted a wave of layoffs across the industry, with Kraken, Coinbase Global, Crypto.com and Gemini announcing sweeping cost-cutting efforts. While prices of digital tokens have regained some ground so far in 2023, volumes remain thin, hurting exchange revenues. Kraken plans to keep several employees based in MENA and Benjamin Ampen, managing director for the region, will stay with the firm. Like Coinbase, Kraken has rolled back global expansion plans, shuttering its operations in Japan at the end of last month. In late November, the firm announced plans to cut 30% of its global workforce — equating to roughly 1,100 people — in response to "current market conditions." — Ben Bartenstein and Emily Nicolle, Bloomberg News

Sightline adds Visa for casino-play payment cards

Andrew Harrer/Bloomberg

Sightline Payments will offer Visa-branded versions of its Play+ casino-play payment cards, the company recently announced. Las Vegas-based Sightline's Play+ card program has 1.5 million users across various casinos offering cashless sports betting and gaming. The move enables users at participating casinos to earn rewards for spending activities at connected food and entertainment operators and spend the funds anywhere through the related mobile app. — Kate Fitzgerald

Bankman-Fried entity that owns Robinhood stake goes bankrupt

Bankman-Fried Released on $250 Million Bond in FTX Fraud Case

Sam Bankman-Fried.

Stephanie Keith/Bloomberg

Sam Bankman Fried's Emergent Fidelity Technologies Ltd., an offshore corporate entity that owns 55 million shares of Robinhood Markets Inc., filed for bankruptcy Friday. The Robinhood stake, worth more than $590 million at current market prices, has already been seized by the U.S. government and is facing competing claims from creditors. Emergent Fidelity also holds $20.7 million of cash, but has no other assets, according to court papers. Bankman-Fried no longer controls the entity, according to court papers. Liquidators overseeing Emergent Fidelity put the unit in Chapter 11 bankruptcy in Delaware. — Jeremy Hill, Bloomberg News