The Weekly Wrap: all you need to know by Friday COB | March 4th

By Gaia Lamperti

The Weekly Wrap is published every Friday and recaps the week’s main stories and deals, as well as upcoming events and announcements. For Prime subscribers only.

The Big Story

This week the UK announced sanctions against Russian banks and oligarchs, as the conflict in Ukraine continues. Britain will lock Russia’s Sberbank out of sterling clearing and impose sanctions on three other banks, VEB development, Sovcombank and Otkritiye, Foreign Secretary Liz Truss said on Monda.

Yet, imposing those sanctions might present some logistical challenges. “This is because Russian companies could restructure subsidiary companies so that they are no longer classified by the Office of Foreign Assets Control as ‘Russian-owned’. To do this they can, and probably will, restructure so that their subsidiaries are no longer at least 50% owned by a Russian parent company,” explained Dr Henry Balani, Global Head of Industry and Regulatory Affairs at Encompass Corporation.

“Another challenge is that sanctioned banks are owned by billionaires and oligarchs with direct links to President Putin. Banks will have to identify these individuals’ ownership of other companies and, in turn, validate if these companies’ assets need to be frozen,” he added.

On a separate note, the UK  government also advised citizens against all travel to Russia and ordered its ports to ban any vessels that are Russian flagged as it increased pressure on Moscow. The European Union too is shutting its airspace to Russian planes, prompting Russia to take similar action in retaliation, and several private companies are selling their Russian assets or withdrawing from their activities in the country, like in the case of oil giants BP and Shell.

Deals of the week

• Payhawk becomes the first-ever Bulgarian unicorn at $1 billion valuation
• Sweater closes $12 million in new funding round
• Junio raises $6 million in Pre-Series A round
• Delio secures $8.3 million in growth funding led by Octopus Ventures
• Family finance app Nosso raises a $2.8 million Seed round by Octopus Ventures and Anthemis
• LHV UK selects Tuum to provide its entire Core Banking infrastructure
• Lloyds Banking Group and Bink partner to create a new channel for retailers

Be on the lookout for

A possible move from Russia towards cryptocurrency adoption to bypass the severe financial sanctions from Western countries. Debates are raging over whether Russian banks could use digital currencies, like Bitcoin, as an alternative currency exchange.

“You simply can’t control cryptocurrency in the same way you can with fiat,” said Mark Basa, Global Brand and Business Manager at crypto company HOKK Finance. “Because of the nature of cryptocurrencies being decentralized, this means that intermediaries such as the centralized (the World Bank, IMF, EU, and the governments they operate with) have zero jurisdiction, control, or influence on maintaining power in friendly or hostile nations.”

Events & Appointments

• The 10th NextGen Payments and RegTech Forum 2022 is an inspirational gathering connecting leading decision-makers from across the entire Payments and RegTech community. The Forum will explore every aspect of payments, from upcoming regulations to new payment methods and practical case studies. It will be held on March 9th-10th in Dublin, Ireland, and will have IBS Intelligence as a media partner.