Across fintech, major players are committing to tie-ups that could drastically alter power dynamics and product offerings. But regulators are paying attention, and may scrutinize—or even void—major deals before they’re executed. 

1. Binance and FTX

Yesterday, crypto exchange Binance announced that it would buy out competitor FTX.com, which is facing a major liquidity crisis. If the takeover succeeds, Binance—which is already the largest crypto exchange—may attract regulator scrutiny due to its sizeable increase in market share. 

But, less than a full day into its due diligence process, Binance seems to be pulling out of its takeover. According to Coindesk, an anonymous source says that the process “reviewing FTX’s internal data and loan commitments has led Binance to strongly lean against completing the transaction.” 

In part, this may stem from news that US regulators are investigating FTX.com, and determining whether the exchange has mishandled customer funds. Both the Securities and Exchange Commission as well as the Commodity Futures Trading Commission are investigating the company’s liquidity crisis, and probing FTX.com’s relationship to founder Sam Bankman-Fried’s trading house, Alameda research. 

If the deal fails to go through, then the crypto universe may undergo a radical shift. Bankman-Fried has been a vocal and material supporter of the crypto ecosystem, and has extended billions in loans to struggling crypto institutions through FTX. The collapse of FTX’s value—as well as Bankman-Fried’s net worth—will both establish Binance CEO Changpeng Zhao emerge as the stronger crypto leader, while also leaving the potential for a chain-reaction liquidity crisis. That volatility only further justifies tighter regulation of crypto, eventually providing authorities like the SEC and CFTC the legal authority they need to reign in the fledgling sector. 

2. Apple and PayPal

Last week, PayPal announced that PayPal and Venmo apps will be compatible with Apple’s Tap to Pay, which will let merchants receive contactless payments through iPhones. PayPal CEO Dan Schulman also said PayPal users will be able to connect their PayPal and Venmo cards with Apple Wallet next year. 

The move, PayPal hopes, will help compensate for slower consumer spending this holiday season, while also helping the company cut costs through payments partnerships. Schulman told analysts last week that the payments giant hopes to achieve $900 million in cost savings by the end of this year, and $1.3 billion next year. 

The move in itself represents a culture shift for PayPal, which has historically kept payments capabilities and infrastructure in-house. But, perhaps more importantly for the future of finance—and for regulators—the move may also facilitate other tie-ups moving forward. Both PayPal and Apple have launched, or are in the process of launching, BNPL solutions. With regulators already suggesting major changes for the lending product in the coming months, the idea that two major players are beginning to align strategically may encourage regulators to intervene more swiftly. 

3. Chase and Amazon

Amazon’s partnership with Chase isn’t new, and that’s precisely what makes the tie-up newsworthy. In 2021, Amazon had threatened to discontinue its relationship with the banking giant for its co-branded Amazon Prime Rewards Visa Signature credit card—and, reportedly, American Express and Synchrony hoped to take over the program. But continuing with Chase helps the e-commerce giant’s customers avoid switching to a new bank, and it also gives Amazon new pathways to payments-driven growth.

"Amazon is being extremely diligent and clever in how it navigates the payments space," said Neil Smith, Head of Strategic Partnerships and Business Development at Forter. By sustaining this existing partnership, Amazon can focus on new financial products like BNPL, while also building out technologies that help it negotiate lower rates with card issuers. Earlier this year, Amazon threatened to discontinue processing Visa credit cards in the UK, only to see Amazon reverse course after negotiations. As Amazon’s payments muscle bulks up, we may see regulators question payments processors’ rising rates, but also look to expand the fruits of Amazon’s negotiations with smaller players.