Silicon Valley Bank shows there wasn't much left to its name

What's in a name, Part II
Yesterday I was talking about LendingClub renaming itself Happen Bank, and what would happen to its ticker symbol. I did not plan on revisiting the naming thing so soon, but then I didn't know that Silicon Valley Bank was going to disappear today.

First Citizens Bancshares, which bought up most of the assets of Silicon Valley Bank in 2023 when the latter collapsed, announced today that it will retire the SVB name in the fourth quarter. Our Nathan Place has the story.

The official story was that the company wanted to align all its businesses under one banner. I suppose there's something to that. The businesses that operated under the SVB banner will now operate under the First Citizens banner. Makes branding a lot easier, that's for sure.

But company names are even bigger branding opportunities than ticker symbols. You have to think that if First Citizens was getting any mileage out of SVB it wouldn't retire the name. I mean, they could have aligned all their businesses under one banner at any time over the last three years and the logic would have been every bit as sound. They gave it three years. The name was fatally wounded. It's time to let it go.

Who could've predicted this?
Prediction markets are not banks, of course, but they are bank-adjacent in enough uncomfortable ways that they have become something our Melinda Huspen has been writing about a lot lately.

The problem, really, is that outfits like Kalshi and Polymarket are trying to sell themselves not as online versions of Las Vegas or Atlantic City, but as online versions of futures markets. Better, in fact, because you can open a contract on the future of virtually anything. Ostensibly they are a subsector of the trade finance industry, and have fallen under the jurisdiction of the Commodities Futures Trading Commission. 

In reality? Well, let's just say there are problems with that narrative. There are questions about insider trading, lots of questions about insider trading. And some members of Congress think they are nothing more than gambling markets, and operating illegally. And some states think the same thing. There are several state lawsuits currently pending as local AGs try to wrest regulation of these markets away from the CFTC.

The latest to join that fray is New York's powerful AG, Letitita James. On Tuesday she filed lawsuits against the crypto exchanges Coinbase and Gemini, alleging that the prediction markets they allow on their websites are unlicensed gambling and thus in violation of the state's gambling laws. 

On the one hand, there is simply an issue of revenue. Licensed gambling operations pay the state taxes. Prediction markets compete with that. On the other hand, there is the even larger question of what exactly prediction markets are, and who should regulate them.

Meanwhile, if you want to wager on who the Giants will pick in tonight's draft, Jordan Tyson is shooting up the boards on Kalshi. See? Good, clean fun.