NEW YORK (Reuters) - A U.S. regulator sued online lender Lending Club Corp (LC.N) on Wednesday for allegedly overcharging consumers and misleading them on hidden fees.
The Federal Trade Commission said in a complaint filed in federal court in California that LendingClub deducted hidden fees from the loans it issued to borrowers, despite promising “no hidden fees.”
LendingClub also allegedly deducted payments automatically from consumers’ bank accounts even when they had paid off their loans, or had canceled automatic payments, according to the complaint. Some consumers were allegedly charged double payments, the complaint said.
LendingClub shares were down as much as 16 percent at $2.72 following the news.
The San Francisco-based start-up is one of the largest companies known as peer-to-peer lenders and runs a website where consumers can apply for loans that are either funded by individual investors or by institutions such as banks.
“We support the important role that the FTC plays in encouraging appropriate standards and best practices,” a spokesman for LendingClub said in a written statement. “In this case, we believe the FTC is wrong, and are very disappointed that it was not possible to resolve this matter constructively with the agency’s current leadership.”
LendingClub has been in recovery mode since May 2016, when it acknowledged issues, including the way it had sold loans to an investor, prompting the departure of its then chief executive.
Its shares have fallen more than 88 percent since its initial public offering in late 2014.
The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada. For more information, please visit: ncfacanada.org
Who thought giving something away could be so complicated?
That's the question crypto innovators have had to come to terms with since the concept of "airdrops" - or the practice of gifting tokens in massive giveaways - has come under the scrutiny of government regulators.
But with the launch of a new product Wednesday, CoinList, an initial coin offering (ICO) facilitator spun out of the renowned startup incubator AngelList, is looking to streamline the process of airdrops in a way that doesn't run afoul with the law.
Aptly named Airdrops, the product runs users through compliance checks and attestations so that a token issuer can give CoinList's users free tokens. On top of that, if the issuer is looking for users that meet certain criteria (be it a profession or location), they can verify that users actually fit those backgrounds.
In this way, CoinList CEO Andy Bromberg believes he has found a way to enable airdropped offerings at a time when many in the industry are looking for a compliant service. Token issuers themselves have had no shortage of issues here, with some, including video-monetization service Stream, even backing off the concept altogether because of the regulatory uncertainty.
Indeed, the SEC hasn't taken a formal stance on how it views crypto tokens delivered through ICO, airdrops or other forms of sales and giveaways, but it's clear regulators are currently investigating that question.
Still, Bromberg is confident in his assembled solutions, and in interview, he hinted at dialogue with regulators that would attest to the viability of the service.
"In our typical compliance first mindset, we sat down and said: Is there a way to pull this off without violating securities laws? And what we came to is the compliant Airdrops product," Bromberg told CoinDesk.
He continued:
"I can't comment on individual discussions with the SEC. What I can say is we are in frequrent communication with them and -- based on our understanding of securities law -- we are very comfortable with this."
Not only does the startup believe it has a solution for working under existing securities law, but it's also opening up its existing user base of past investors to new token issuers. Once users have gone through the company's compliance flow, they will be verified to receive airdrops, and CoinList will take a nominal fee from users (less than $1 per airdrop) to accept new tokens.
To date, according to its website, CoinList has run $850 million worth of token sales through its platform, representing what could be a vast pool of people interested in investing and taking part in future crypto tokens.
Compliance as a service
While that pool of potential investors will likely be attractive for token issuers, Coinlist's product is opt-in - a feature added to reduce spam and mitigate the security threats that have become a common annoyance from crypto enthusiasts involved in such offerings.
Also, CoinList says it's only willing to work with token issuers that are focused on complying with the law. And that's partly because CoinList will be promoting these projects for issuers.
Still, CoinList's Airdrops product seems to be set up whereby all the compliance effort is offloaded from the issuer, which many issuers will like since many are not securities law experts.
CoinList's product allows for airdrops that might fall under Regulation S and Regulation D and will also collaborate with AngelList spin-off Republic, which has a license to sell securities under limited conditions to non-accredited investors using Regulation CF.
The company is also doing a country-by-country analysis to determine what sorts of checks issuers will need to do in order to airdrop to users around the world.
Depending not only on the goals of the issuer and who they want to give to, different levels of know your customer (KYC) and anti-money laundering (AML) requirements will be needed, and whether issuers can to both accredited and unaccredited investors or one or the other.
And all of this has already proven enticing to token issuers. Bromberg told CoinDesk the company is in negotiations with more than one issuer to use its Airdrops product but declined to disclose which ones.
While CoinList has so far been focused on fundraising, Bromberg said that potential issuers will not have to have a token sale on the platform in order to use the new product.
"We're interested in exploring this model where in some cases ... funding might be separate from distribution," Bromberg said.
The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada. For more information, please visit: ncfacanada.org
VANCOUVER, April 4, 2018 /PRNewswire/ - Etherparty Smart Contracts Inc. ("Etherparty"), a Vancouver blockchain technology company, is excited to announce the Rocket Three for Free contest, which will offer three projects or startup companies the opportunity to win full use of Etherparty's cryptocurrency crowdfunding platform, Rocket, free of charge.
The anticipation surrounding the launch of Etherparty's crowdfund creator has been steadily growing for months, and with the imminent arrival of Rocket, Etherparty has decided to hold a contest for startups looking to crowdfund using cryptocurrency. The smart contract solution developed by Etherparty called Rocket can be used on Bitcoin or Ethereum and is valued at USD $100,000.
Starting today, April 4, 2018, and running until April 30, 2018, applicants can submit a report, detailing their project, white paper and token purpose and functionality, along with company information including team LinkedIn profiles, social media channels, and Github, if public.
Once all of the applications have been submitted, short-listed companies will be interviewed by Etherparty's leadership team, and the three winners will be announced in May. In addition, outside of the three winners, Etherparty will be selecting up to 100 projects that will be able to receive a discount to launch their crowdfund with Etherparty.
"The contest is an amazing chance for a few young companies to harness the latest in crowdfunding technology at no cost, and no risk," said Kevin Hobbs, CEO at Etherparty.
Each winner will receive free token and crowdfund smart contracts, along with $20,000 worth in marketing services, to support their business and crowdfunding initiatives. The Rocket contest is looking to reward the best of the best, and Etherparty is excited to see what the community has to submit.
"We are looking for blockchain projects that are innovative and exciting, and we especially love projects that are problem-solving a large or global issue."
Only one submission per startup is allowed, and each submission must contain all of the required information to be eligible. To learn more about the Three for Free contest, visit contest.etherparty.com/threeforfree.
For continued updates, visit etherparty.com and subscribe to the company mailing list. You can also join the Etherparty conversation via Telegram, or on Facebook, Twitter, and BitcoinTalk.
About Etherparty
Etherparty is a blockchain technology company that develops end-to-end smart contract solutions powered by the FUEL token. Learn more about Etherparty and its software products at etherparty.com.
The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry in Canada. For more information, please visit: ncfacanada.org
The Ontario Securities Commission (OSC) has approved Ontario's first-ever regulated initial coin offering (ICO).
Under the auspices of the Canadian Securities Administrators' "regulatory sandbox", the OSC granted regulatory relief to Toronto-based Token Funder Inc., which will exempt the firm from the dealer registration requirements, and allow it to carry out an ICO under existing prospectus exemptions.
"We are pleased to announce that we just approved the first token offering out of Ontario. It is important that we continue to foster innovative new ways to raise capital and invest, and this announcement is a testament to the dedicated support we are providing in this space," the commission says in a statement.
According to the OSC's decision, the firm was established to create a "smart token asset management platform", which is intended to, among other things, "facilitate third-party issuers raising capital through the offering of blockchain-based securities, including tokens and coins."
Token Funder also intends to provide token and coin management and governance services for issuers, and to facilitate token transfers, subject to regulatory approval.
The proposed ICO will be used to fund the creation of the platform, and to facilitate transfers of digital FNDR tokens under prospectus exemptions. The firm is planning to create 1 billion FNDR tokens on the ethereum blockchain, and to distribute up to 200 million on them as part of the offering (raising around $10 million).
The relief was granted with conditions, including: the firm will conduct know-your-client (KYC) and a suitability review for each investor; and investors undergo a comprehensive onboarding process to ensure, among other things that they have a "detailed understanding" of cryptocurrency and digital token offerings.
This "should not necessarily be viewed as a precedent" for other firms, the OSC decision says.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada. Learn more About Us or visit ncfacanada.org.
TORONTO Oct. 18, 2017 – Lending Loop has officially helped provide financing of more than $10 million to small businesses across Canada. To date, the company, which is Canada’s premier peer-to-peer (P2P) lending platform, has helped over 180 small businesses in a variety of industries access funding to expand their businesses.
Speaking on the achievement, Lending Loop co-founder and CEO Cato Pastoll said:
“We’re excited to have hit this milestone in such a short period of time. It wouldn’t have been possible without the support of our rapidly growing community of 12,000 Canadians who are all helping to contribute to our collective success. Everyone knows how important small businesses are to the continued growth of our economy and we’re proud to be playing a part in helping their growth.”
Lending Loop’s unique P2P lending model allows Canadians across the country to lend their money to small businesses posted on Lending Loop’s online marketplace. These investors derive their return from the interest rate attached to each loan, which in turn corresponds to the risk rating of that business. By cutting out the banks and the middlemen, Lending Loop loans are often significantly more affordable than loans from other financial providers, with rates starting as low as 5.9%.
When asked about the milestone, Lending Loop co-founder and CTO Brandon Vlaar said that:
“Our team is deeply passionate about helping the small business community thrive. We’re looking forward to helping even more small businesses learn about our better way to borrow, while also educating Canadians about how they can grow their wealth through this new and exciting investment opportunity.”
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada. Learn more About Us or visit ncfacanada.org.
We are creating an intelligence that is external to humans and housed in the virtual economy. This is bringing us into a new economic era—a distributive one—where different rules apply.
A year ago in Oslo Airport I checked in to an SAS flight. One airline kiosk issued a boarding pass, another punched out a luggage tag, then a computer screen showed me how to attach it and another where I should set the luggage on a conveyor. I encountered no single human being. The incident wasn’t important but it left me feeling oddly that I was out of human care, that something in our world had shifted.
That shift of course has been going on for a long time. It’s been driven by a succession of technologies—the Internet, the cloud, big data, robotics, machine learning, and now artificial intelligence—together powerful enough that economists agree we are in the midst of a digital economic revolution. But there is less agreement on how exactly the new technologies are changing the economy and whether the changes are deep. Robert Gordon of Northwestern University tells us the computer revolution “reached its climax in the dot-com era of the 1990s.” Future progress in technology, he says, will be slower.
So in what way exactly are the new technologies changing the economy? Is the revolution they are causing indeed slowing—or is it persistent and deep? And if so how will it change the character of the economy?
I argued a few years back that the digital technologies have created a second economy, a virtual and autonomous one, and this is certainly true. But I now believe the main feature of this autonomous economy is not merely that it deepens the physical one. It’s that it is steadily providing an external intelligence in business—one not housed internally in human workers but externally in the virtual economy’s algorithms and machines. Business and engineering and financial processes can now draw on huge “libraries” of intelligent functions and these greatly boost their activities—and bit by bit render human activities obsolete.
I will argue this is causing the economy to enter a new and different era. The economy has arrived at a point where it produces enough in principle for everyone, but where the means of access to these services and products, jobs, is steadily tightening. So this new period we are entering is not so much about production anymore—how much is produced; it is about distribution—how people get a share in what is produced. Everything from trade policies to government projects to commercial regulations will in the future be evaluated by distribution. Politics will change, free-market beliefs will change, social structures will change.
We are still at the start of this shift, but it will be deep and will unfold indefinitely in the future.
The third morphing
How did we get to where we are now? About every 20 years or so the digital revolution morphs and brings us something qualitatively different. Each morphing issues from a set of particular new technologies, and each causes characteristic changes in the economy.
The first morphing, in the 1970s and ’80s, brought us integrated circuits—tiny processors and memory on microchips that miniaturized and greatly speeded calculation. Engineers could use computer-aided design programs, managers could track inventories in real time, and geologists could discern strata and calculate the chance of oil. The economy for the first time had serious computational assistance. Modern fast personal computation had arrived.
The second morphing, in the 1990s and 2000s, brought us the connection of digital processes. Computers got linked together into local and global networks via telephonic or fiber-optic or satellite transmission. The Internet became a commercial entity, web services emerged, and the cloud provided shared computing resources. Everything suddenly was in conversation with everything else.
It’s here that the virtual economy of interconnected machines, software, and processes emerges, where physical actions now could be executed digitally. And it’s also here that the age-old importance of geographical locality fades. An architecture firm in Seattle could concern itself with the overall design of a new high-rise and have less expensive workers in Budapest take care of the detailing, in an interactive way. Retailers in the United States could monitor manufacturers in China and track suppliers in real time. Offshoring took off, production concentrated where it was cheapest—Mexico, Ireland, China—and previously thriving home local economies began to wither. Modern globalization had arrived and it was very much the result of connecting computers.
The third morphing—the one we are in now—began roughly in the 2010s, and it has brought us something that at first looks insignificant: cheap and ubiquitous sensors. We have radar and lidar sensors, gyroscopic sensors, magnetic sensors, blood-chemistry sensors, pressure, temperature, flow, and moisture sensors, by the dozens and hundreds all meshed together into wireless networks to inform us of the presence of objects or chemicals, or of a system’s current status or position, or changes in its external conditions.
These sensors brought us data—oceans of data—and all that data invited us to make sense of it. If we could collect images of humans, we could use these to recognize their faces. If we could “see” objects such as roads and pedestrians, we could use this to automatically drive cars.
As a result, in the last ten years or more, what became prominent was the development of methods, intelligent algorithms, for recognizing things and doing something with the result. And so we got computer vision, the ability for machines to recognize objects; and we got natural-language processing, the ability to talk to a computer as we would to another human being. We got digital language translation, face recognition, voice recognition, inductive inference, and digital assistants.
What came as a surprise was that these intelligent algorithms were not designed from symbolic logic, with rules and grammar and getting all the exceptions correct. Instead they were put together by using masses of data to form associations: This complicated pixel pattern means “cat,” that one means “face”—Jennifer Aniston’s face. This set of Jeopardy! quiz words points to “Julius Caesar,” that one points to “Andrew Jackson.” This silent sequence of moving lips means these particular spoken words. Intelligent algorithms are not genius deductions, they are associations made possible by clever statistical methods using masses of data.
Of course the clever statistical techniques took huge amounts of engineering and several years to get right. They were domain specific, an algorithm that could lip read could not recognize faces. And they worked in business too: this customer profile means “issue a $1.2 million mortgage”; that one means “don’t act.”
Computers, and this was the second surprise, could suddenly do what we thought only humans could do—association.
The coming of external intelligence
It would be easy to see associative intelligence as just another improvement in digital technology, and some economists do. But I believe it’s more than that. “Intelligence” in this context doesn’t mean conscious thought or deductive reasoning or “understanding.” It means the ability to make appropriate associations, or in an action domain to sense a situation and act appropriately. This fits with biological basics, where intelligence is about recognizing and sensing and using this to act appropriately. A jellyfish uses a network of chemical sensors to detect edible material drifting near it, and these trigger a network of motor neurons to cause the jellyfish to close automatically around the material for digestion.
Thus when intelligent algorithms help a fighter jet avoid a midair collision, they are sensing the situation, computing possible responses, selecting one, and taking appropriate avoidance action.
There doesn’t need to be a controller at the center of such intelligence; appropriate action can emerge as the property of the whole system. Driverless traffic when it arrives will have autonomous cars traveling on special lanes, in conversation with each other, with special road markers, and with signaling lights. These in turn will be in conversation with approaching traffic and with the needs of other parts of the traffic system. Intelligence here—appropriate collective action—emerges from the ongoing conversation of all these items. This sort of intelligence is self-organizing, conversational, ever-adjusting, and dynamic. It is also largely autonomous. These conversations and their outcomes will take place with little or no human awareness or intervention.
The interesting thing here isn’t the form intelligence takes. It’s that intelligence is no longer housed internally in the brains of human workers but has moved outward into the virtual economy, into the conversation among intelligent algorithms. It has become external. The physical economy demands or queries; the virtual economy checks and converses and computes externally and then reports back to the physical economy—which then responds appropriately. The virtual economy is not just an Internet of Things, it is a source of intelligent action—intelligence external to human workers.
This shift from internal to external intelligence is important. When the printing revolution arrived in the 15th and 16th centuries it took information housed internally in manuscripts in monasteries and made it available publicly. Information suddenly became external: it ceased to be the property of the church and now could be accessed, pondered, shared, and built upon by lay readers, singly or in unison. The result was an explosion of knowledge, of past texts, theological ideas, and astronomical theories. Scholars agree these greatly accelerated the Renaissance, the Reformation, and the coming of science. Printing, argues commentator Douglas Robertson, created our modern world.
Now we have a second shift from internal to external, that of intelligence, and because intelligence is not just information but something more powerful—the use of information—there’s no reason to think this shift will be less powerful than the first one. We don’t yet know its consequences, but there is no upper limit to intelligence and thus to the new structures it will bring in the future.
How this changes business
To come back to our current time, how is this externalization of human thinking and judgment changing business? And what new opportunities is it bringing?
Some companies can apply the new intelligence capabilities like face recognition or voice verification to automate current products, services, and value chains. And there is plenty of that.
More radical change comes when companies stitch together pieces of external intelligence and create new business models with them. Recently I visited a fintech (financial technology) company in China, which had developed a phone app for borrowing money on the fly while shopping. The app senses your voice and passes it to online algorithms for identity recognition; other algorithms fan out and query your bank accounts, credit history, and social-media profile; further intelligent algorithms weigh all these and a suitable credit offer appears on your phone. All within seconds. This isn’t quite the adoption of external intelligence; it is the combining of sense-making algorithms, data-lookup algorithms, and natural-language algorithms to fulfill a task once done by humans.
In doing this, businesses can reach into and use a “library” or toolbox of already-created virtual structures as Lego pieces to build new organizational models. One such structure is the blockchain, a digital system for executing and recording financial transactions; another is Bitcoin, a shared digital international currency for trading. These are not software or automated functions or smart machinery. Think of them as externally available building blocks constructed from the basic elements of intelligent algorithms and data.
The result, whether in retail banking, transport, healthcare, or the military, is that industries aren’t just becoming automated with machines replacing humans. They are using the new intelligent building blocks to re-architect the way they do things. In doing so, they will cease to exist in their current form.
Businesses can use the new opportunities in other ways. Some large tech companies can directly create externally intelligent systems such as autonomous air-traffic control or advanced medical diagnostics. Others can build proprietary databases and extract intelligent behavior from them. But the advantages of being large or early in the market are limited. The components of external intelligence can’t easily be owned, they tend to slide into the public domain. And data can’t easily be owned either, it can be garnered from nonproprietary sources.
So we will see both large tech companies and shared, free, autonomous resources in the future. And if past technology revolutions are indicative, we will see entirely new industries spring up we hadn’t even thought of.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada. Learn more About Us or visit ncfacanada.org.
Business mentoring company Britbots launched a crowdfunding platform Britbots CROWD to support British robotics startups, the company announced today.
“Whilst talking to investors about the British Robotics Seed Fund we realized that there was a broad appetite amongst investors to include some high-potential robotics businesses in their portfolio on a discretionary basis without necessarily going down the fund route,” founder Dominic Keen said in a prepared statement. “Hence we are delighted to have launched Britbots CROWD, the world’s only dedicated equity crowd-funding platform for robotics companies, giving investors direct access to this exciting class of investments for the first time.”
The platform gives private investors a way to build their personal share portfolio of new robotics companies. The companies listed on Britbots CROWD have already received funding from Britbots’ British Robotics Seed Fund, which raised more than £500,000.
The companies listed will accept a minimum investment amount of £200, which will allow mainstream investors to purchase shares, and will receive mentoring and business development support from Britbots. In addition, investors will also receive tax incentives under SEIS or EIS.
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both investment and social crowdfunding, blockchain ICO, alternative finance, fintech, P2P and online investing stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a vibrant and innovative online financing industry in Canada. Learn more About Us or visit ncfacanada.org.