Hey there, PoI readers! 💫

It's your favorite crypto connoisseur, Mochi, back with another serving of tantalizing tech and web3 news. From the EU slapping Meta and TikTok with transparency violations and the Bank of England side-eyeing AI speculation, to Ripple's massive $1.25 billion shopping spree and Crypto.com going for that federal banking glow-up, we've got a lot to unpack. So, buckle up and get ready for a wild ride through the wonderland of digital assets and regulatory drama!

INTEL BRIEF

🟧 The European Commission has found Meta and TikTok in violation of DSA transparency rules, accusing them of making it too difficult for researchers to access public data and for users to report illegal content.

🟧 The Bank of England is investigating the surge in data center lending as regulators worry that AI speculation could trigger a financial bubble similar to the dot-com crash.

🟧 Ripple has completed its $1.25 billion acquisition of Hidden Road, now rebranded as Ripple Prime, making it the first crypto company to own a multi-asset prime broker serving institutional clients.

🟧 Crypto.com has applied for a US National Trust Bank Charter, aiming to offer federally regulated custody and trust services for digital assets across the United States.

Meta and TikTok Get Busted by EU for Making Data Access Way Too Complicated

Meta and TikTok are back in the EU's digital doghouse, and this time it's all about playing hide-and-seek with data. The European Commission (EC) dropped some preliminary findings on Friday that basically said both tech giants are breaking the rules when it comes to transparency under the Digital Services Act (DSA).

So what's the tea? The EC found that both companies are making it unnecessarily difficult for researchers to access public data. We're talking burdensome procedures and tools so clunky they'd make a Windows 95 computer jealous. The result? Researchers are left with partial or unreliable data, which makes it nearly impossible to study whether users—especially minors—are being exposed to illegal or harmful content. Not exactly the transparency vibes the EU was hoping for.

But wait, there's more! The Commission also called out Meta's Instagram and Facebook for making it way too complicated for EU residents to report illegal content. Apparently, both platforms are throwing up unnecessary steps and using "dark patterns"—those sneaky design tricks that manipulate users into doing (or not doing) certain things. The EC believes this makes Meta's content moderation system potentially ineffective, which is a polite way of saying "not great, folks."

And if that wasn't enough, the Commission pointed out that Meta's appeal mechanisms don't let EU users properly explain why they're contesting content decisions or provide supporting evidence. It's like trying to argue your case with one hand tied behind your back.

TikTok, for its part, claims it's made "substantial investments" in data sharing and has given nearly 1,000 research teams access to its data. The company is reportedly reviewing the findings but argues that easing data safeguards creates tension between the DSA and GDPR (Europe's privacy rules). Translation: "We're caught between a rock and a hard regulatory place."

Meta insists it disagrees with the breach allegations and says it's made changes to comply with DSA requirements since the law came into force. They're "confident" their solutions match what's required—though the EC clearly isn't buying it yet.

Here's the kicker: if these breaches are confirmed, both companies could face fines of up to 6% of their global annual revenue. That's not pocket change—we're talking potential billions. Both Meta and TikTok will get a chance to review documents, challenge the findings, and commit to fixes, but for now, they're both on the EU's naughty list.

Meta and TikTok are believed to be violating EU's Digital Services Act by making it too hard for researchers to access public data and for users to report illegal content

The EC accused Meta of using "dark patterns" and creating burdensome reporting processes on Facebook and Instagram

Penalties for confirmed breaches could reach up to 6% of global annual revenue—potentially billions in fines

Bank of England Thinks AI Hype Could End Like the Dot Com Bubble Did

The Bank of England (BOE) is officially in its "concerned parent" era, and this time the worry is all about AI speculation getting a little too spicy. According to Bloomberg, the UK's top bank is investigating how financiers are lending to data centers as a backdoor way to bet big on AI's future—and they're not thrilled about it.

Here's the plot: The BOE has been side-eyeing the AI hype train for a while now, already warning that if AI companies don't live up to their sky-high valuations, we could see a correction that makes the dot-com bubble crash of the early 2000s look like a minor hiccup. Remember when every company with ".com" in its name was worth billions until suddenly... they weren't? Yeah, the BOE is getting those vibes again.

Now the bank is digging deeper into the relationship between AI companies and the financiers who are practically throwing money at them. Bloomberg reports that the investigation kicked off after the BOE noticed a suspicious trend: funds are increasingly being redirected from hiring staff to spending billions on constructing data centers. It's believed that data center lending, while still a niche market, is about to become absolutely crucial—McKinsey estimated in April that we'll need a jaw-dropping $6.7 trillion by 2030 just to keep up with AI's power-hungry demands.

Why data centers, you ask? Well, with few AI-native stocks available and crypto tokenization of private AI stocks not quite ready for prime time, lending to data centers has become one of the few ways for big players to place massive bets on AI without actually, you know, buying AI stocks directly. It's speculated to be the financial equivalent of betting on the casino building instead of the poker table.

But here's where it gets interesting: The BOE's investigation could lead to future regulatory limits on this lending strategy, which would potentially curb returns and slow AI innovation. The bank is worried that if this debt-financed AI infrastructure boom actually materializes, financial stability risks are going to skyrocket. Banks would be exposed both directly (through loans to AI companies) and indirectly (through credit facilities to private funds betting on AI).

And if you thought the BOE was just picking on AI, think again. UK crypto groups have been slamming the bank's proposal to limit individual stablecoin holdings to between £10,000-£20,000 ($13,310-$26,620), calling it restrictive, difficult, and expensive to implement. About 40% of surveyed crypto investors said their banks have either blocked or delayed payments to crypto providers. Seems like the BOE is taking a "better safe than sorry" approach to... well, everything innovative.

The BOE's Friday statement made it clear: "If the projected scale of debt-financed AI and associated energy infrastructure investment materializes over this decade, financial stability risks are likely to grow." Translation? Pump the brakes, everyone.

The Bank of England is investigating data center lending as a way financiers speculate on AI, fearing a dot-com-style bubble crash

An estimated $6.7 trillion will be needed by 2030 to fund AI infrastructure, making data center lending a crucial funding source

The probe could lead to regulatory limits on this lending strategy, potentially slowing AI innovation and curbing returns

Ripple Just Bought a Whole Prime Broker for $1.25 Billion and Nobody Saw It Coming

Ripple just went from crypto company to full-blown financial Swiss Army knife, and honestly? They're not being subtle about it. The company has officially closed its $1.25 billion acquisition of non-bank prime broker Hidden Road, slapping a fresh coat of paint on it and rebranding it as Ripple Prime. This is believed to be one of Ripple's biggest power moves yet, and it's pushing the company way beyond just digital assets.

So what exactly did Ripple just buy? Well, they're now the first crypto company to own and operate a multi-asset prime broker. We're talking about a one-stop shop that covers clearing, financing, and brokerage across digital assets, derivatives, swaps, foreign exchange, and fixed-income products—all tailored for institutional clients. Basically, Ripple just became the cool kid who can do everyone's homework and throw the best parties.

And business is already booming. Ripple said on Friday that Ripple Prime's activity has grown threefold since the deal was announced back in early April, with even more growth expected from new and existing customers. Not too shabby for a company that's still in its acquisition honeymoon phase.

Ripple is part of a growing crew of crypto-native firms that are building bridges between traditional finance (TradFi) and the digital asset world. The goal? Help banks and institutions conduct cross-border transactions and other financial operations using blockchain and crypto products. It's like teaching your grandparents to use smartphones, except the grandparents are giant banks and the smartphone is blockchain.

Now here's where it gets really interesting: Ripple plans to put this new business on blockchain rails. The company believes Ripple Prime will "significantly enhance the utility and reach" of its Ripple USD (RLUSD) stablecoin. Translation? They're going to use their own stablecoin to grease the wheels of this entire operation. Ripple noted that certain derivatives customers are already opting to hold balances in RLUSD and using it as collateral for several prime brokerage products. Smart move, if you ask me—create the product, then create the ecosystem that needs it.

Looking ahead, Ripple wants to integrate blockchain capabilities into Ripple Prime to streamline operations and slash costs. The company's "foundational digital asset infrastructure" across payments, crypto custody, stablecoin services, and XRP (Ripple's native cryptocurrency) will all complement what Ripple Prime offers.

But wait, there's more! This acquisition is just the latest in Ripple's shopping spree. The company also acquired treasury management provider GTreasury last Thursday and stablecoin-powered payment platform Rail back in August. Add in the acquisitions of Standard Custody (June 2024) and Metaco (June 2023), and you've got six strategic deals in 28 months. Someone at Ripple clearly has the corporate credit card and isn't afraid to use it—all part of their broader push to offer blockchain and crypto products to institutions.

Ripple closed its $1.25 billion acquisition of Hidden Road, rebranded as Ripple Prime, becoming the first crypto company to own a multi-asset prime broker

Ripple Prime's business has grown threefold since the deal was announced, with plans to integrate blockchain capabilities and boost RLUSD stablecoin utility

This marks Ripple's sixth acquisition in 28 months as part of its aggressive expansion into institutional fintech services

Crypto.com Wants Federal Banking Powers and They're Not Playing Around

Crypto.com is making moves to get some official federal street cred, and they're doing it the old-fashioned way: by applying for a US National Trust Bank Charter. The Singapore-based crypto exchange announced on Friday that it's seeking federal approval to expand its custody and staking services nationwide, which would let them operate under the watchful eye of the Office of the Comptroller of the Currency (OCC).

So what exactly is a National Trust Bank Charter, and why should you care? Well, it's basically a federal license from the OCC that allows a company to operate as a limited-purpose trust bank. The key word here is "limited"—these banks don't take deposits or make loans like your neighborhood Chase or Wells Fargo. Instead, they focus on the arguably less exciting (but super important) job of holding, managing, and safeguarding assets for clients. Think of it as becoming the responsible friend who holds everyone's keys at the party.

If approved, Crypto.com would be able to offer federally regulated custody services for digital asset treasuries, exchange-traded funds (ETFs), and other institutional and corporate clients. It's worth noting that the company is already licensed as a trust in New Hampshire, but apparently, they're ready to level up to the federal big leagues.

And Crypto.com isn't exactly breaking new ground here—they're just joining what's becoming a bit of a crypto company trend. Back in April, Cointelegraph reported that several crypto firms, including BitGo and Circle, were considering applying for US bank charters. Anchorage Digital Bank has been operating under a US National Trust Bank Charter since January 2021, proving that it's actually possible to get federal banking approval without spontaneously combusting. Stablecoin issuer Paxos also received preliminary conditional approval for one of these charters back in 2021.

Most recently, Coinbase filed a similar application with the OCC on October 3. In a blog post that probably made their legal team very happy, Coinbase clarified that while it "has no intention of becoming a bank" (because that sounds boring), the charter would enable them to launch new products "with the confidence of regulatory clarity." And let's be real—in the wild west of crypto, regulatory clarity is about as valuable as a winning lottery ticket.

The push for federal bank charters represents a significant shift in how crypto companies are positioning themselves. Rather than fighting with regulators or operating in gray areas, these firms are essentially saying, "Hey, we want to play by the rules—just tell us what the rules are." It's believed that having federal approval could open doors to institutional clients who've been sitting on the sidelines, waiting for more regulatory certainty before diving into digital assets.

For Crypto.com, this move signals their commitment to expanding their US footprint and competing more directly with traditional financial institutions in the custody and asset management space.

Crypto.com has applied for a US National Trust Bank Charter to offer federally regulated custody and trust services for digital assets

The charter would allow operations under the Office of the Comptroller of the Currency, focusing on holding and safeguarding assets rather than traditional banking

Coinbase, BitGo, Circle, Anchorage Digital, and Paxos have also pursued or obtained similar federal banking licenses

And that's a wrap, my lovely PoI readers! I hope this edition left you feeling informed, entertained, and maybe even a little bit richer (in knowledge, of course). From regulatory crackdowns to billion-dollar acquisitions, today's crypto and tech world never sleeps—and neither do we! Remember to stay curious, stay informed, and keep spreading the love. Until next time, this is Mochi, signing off with a virtual high-five!

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