Aramco-backed fintech opens bank branch in London to help Muslims invest

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4 days ago

January 24, 2023

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Islamic fintech startup Wahed has opened its first physical branch on Baker Street in London. The glossy retail location is designed to look like an Apple store.

Wahed

An investing platform backed by the likes of oil giant Saudi Aramco and French soccer player Paul Pogba is launching a novel proposition in the U.K.: a physical branch and bank accounts backed by gold.

New York-based Wahed, which describes itself as a “halal investing platform,” has opened a branch in the U.K. in a bid to target the country’s 3.9 million Muslims with a sharia-compliant investment management and advice service.

The glossy retail location has a similar design to an Apple store, with digital displays inside and a bright sign displaying its logo outside. It is located on Baker Street in central London, just opposite a branch of U.K. banking giant HSBC.

Khabib Nurmagomedov, the Russian former professional mixed martial artist, is a promoter of the firm and will be among those attending the branch opening Tuesday.

Wahed is also debuting a debit card that lets users deposit funds with an exchange-traded commodity that tracks the price of gold, meaning they can effectively pay for everyday goods via gold.

Investors will be able to redeem the gold in their accounts for physical bars. Junaid Wahedna, CEO and Co-founder of Wahed, said it’s a way for Muslim — as well as non-Muslim — consumers to beat currency fluctuations and the rising cost of living.

“[Muslims are] an underserved community as a whole,” Wahedna said in an interview with CNBC, referring to the market opportunity for digital Islamic finance. “It’s a minority community, there’s a lack of financial literacy.”

Banking startups such as Monzo and Revolut have flourished in the U.K. without physical bank branches, offering smartphone apps that help users manage all their finances. But Wahedna cautioned that this risks leaving behind Muslim consumers.

“In the United Kingdom, [the Muslim community is] actually one of the lowest socio-economic segments of the country,” Wahed’s boss said, with “low incomes or financial literacy.”

“They have trust issues,” he added. “And so they want to see a physical presence before they trust you with money.”

Wahed’s service aims to help clients adhere to the Islamic faith’s strict doctrines on financial services: sharia law forbids its followers from charging or earning interest on loans, or investing in firms that make most of their money from the sale of things such as alcohol and gambling.

Wahed prohibits investments in companies that make money from lending, gambling, alcohol and tobacco. An account with Wahed also doesn’t offer interest on savings, nor does it tout wild returns on risky crypto tokens. Instead, the value of users’ deposits tracks the value of gold, with the precious metal fluctuating in price depending on supply and demand.

“I think it really fits with the Muslim community and what their needs are,” Wahedna said. “Because otherwise, what happens is the Muslim community, because they’re underserved, they keep their money in cash under their mattress, or in something that’s very unsafe, and they lose their money every few years because there’s a scam in the community or someone takes advantage of them. And that poverty cycle just continues.”

CEO slams lending-focused fintechs

Junaid slammed the state of modern fintech companies, suggesting that the industry is too focused on consumer lending with the rise of Klarna and other hyped “buy now, pay later” services.

“All of their business plans are built around lending revenue, right? Even digital banks, it’s like, okay, I’ll start off being a new bank, but then eventually, I’m gonna get a banking license,” said Wahedna.

Wahed is debuting a debit card linked to a gold-backed spending account. The startup is backed by French soccer star Paul Pogba.

Wahed

He said Wahed is focused on making money by charging wealth management fees, which charge users a percentage of their overall asset holdings. The startup, which was founded in 2017, remains lossmaking, but has hit operating breakeven in Malaysia and the U.S., he added.

“I feel that fintech, like most of the finance industry, is very heavily geared towards lending,” Wahedna said. “In fact, I would say, it’s making the cost of living crisis, a debt crisis, worse with a lot of the products.”

“If you look at the buy, now pay later companies, people are struggling — that’s the worst type of innovation, you’re making it easier to get people into debt,” he added.

Wahedna stressed that the company is not only for Muslims and aims to serve followers of other Abrahamic faiths as well, including Judaism and Christianity.

Staff at its London branch will help customers open accounts, make investments and give guidance on wills and estate planning.

The firm is targeting high-net-worth individuals as well as less well-off consumers, Wahedna said.

Wahed has raised $75 million of total funding to date from investors including Saudi Aramco Entrepreneurship Capital, the venture capital arm of Saudi state-backed oil firm Saudi Aramco, as well as French footballer Paul Pogba, who is a practicing Muslim.

Islamic finance has achieved significant growth over the past decade and is expected to reach $4.9 trillion in value by 2025, according to Refinitiv’s Islamic Finance Development Indicator. A number of other fintech players are seeking to tap into the halal money space, including Zoya and Niyah.

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Sam Bankman-Fried tried to influence witness through Signal, DOJ alleges

Published

3 hours ago

January 28, 2023

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Sam Bankman-Fried tried to influence witness through Signal, DOJ alleges

Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court, New York, January 3, 2023.

Ed Jones | AFP | Getty Images

Federal prosecutors are attempting to bar indicted FTX co-founder Sam Bankman-Fried from using encrypted messaging software, citing efforts that may “constitute witness tampering,” according to a letter filed in Manhattan federal court Friday.

Bankman-Fried reached out to the “current General Counsel of FTX US who may be a witness at trial,” prosecutors said. Ryne Miller, who was not identified by name in the government filing, is the current counsel for FTX US, and a former partner at Kirkland & Ellis.

The government claims that Bankman-Fried wrote to Miller via Signal, an encrypted messaging app, on Jan. 15, days after bankruptcy officials at crypto exchange disclosed the recovery of more than $5 billion in FTX assets.

“I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other,” Bankman-Fried allegedly told Miller.

Bankman-Fried has also been in contact with “other current and former FTX employees,” the filing said. Federal prosecutors allege that Bankman-Fried’s request suggests an effort to influence the witness’s testimony, and that Bankman-Fried’s effort to improve his relationship with Miller “may itself constitute witness tampering.”

Both Miller and a representative for Bankman-Fried declined to comment.

In restricting Bankman-Fried’s access to Signal and other encrypted messaging platforms, the government cites a need to “prevent obstruction of justice.” Federal prosecutors claim that Bankman-Fried directed Alameda and FTX through Slack and Signal, and ordered his employees set communications to “autodelete after 30 days or less.”

Citing previously undisclosed testimony from ex-Alameda CEO Caroline Ellison, the government claimed that Bankman-Fried indicated “many legal cases turn on documentation and it is more difficult to build a legal case if information is not written down or preserved.” Ellison pled guilty to multiple charges of fraud and has been cooperating with the U.S. Attorney’s efforts to build a case against Bankman-Fried.

Bankman-Fried pled not guilty to eight charges in connection with the collapse of his multibillion-dollar crypto empire, FTX. He is due in federal court in October, after being released on $250 million bond.

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Amazon to start charging delivery fees on Fresh grocery orders under $150

Published

5 hours ago

January 27, 2023

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Amazon to start charging delivery fees on Fresh grocery orders under 0

Brendan McDermid | Reuters

Amazon will start charging delivery fees for Fresh grocery orders that are less than $150, in a move it said will help keep prices low on its services.

Beginning Feb. 28, Prime members who want home delivery from Amazon Fresh will incur a $9.95 delivery fee for orders under $50, while orders between $50 and $100 will include a $6.95 delivery fee, and orders between $100 and $150 will carry a $3.95 delivery fee, the company said in a note to customers viewed by CNBC. Only Prime members can use the delivery service, although anybody can shop at an Amazon Fresh grocery store.

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Amazon previously guaranteed members of its $139-a-year Prime service free delivery on Fresh orders over $35.

“This service fee will help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience,” the notice stated.

The move comes as Amazon CEO Andy Jassy has embarked on a wide-ranging review of the company’s expenses amid slowing sales and a worsening economic outlook. Amazon has eyed laying off 18,000 employees, frozen hiring in its corporate workforce, and paused or canceled some projects such as a sidewalk robot and a telehealth service.

Amazon has previously recalibrated its approach to online grocery deliveries, a business that is notoriously challenging from a cost and efficiency perspective. In 2021, Amazon added a $10 service fee for Whole Foods delivery orders to Prime members, after previously offering them for no extra charge.

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Tesla just had its best week since May 2013

Published

6 hours ago

January 27, 2023

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Tesla just had its best week since May 2013

Tesla CEO Elon Musk smiles as he addresses guests at the Offshore Northern Seas 2022 (ONS) meeting in Stavanger, Norway on August 29, 2022.

Carina Johansen | AFP | Getty Images

Tesla shares surged 33% this week, marking their best weekly performance since May 2013 and second best on record.

The stock rose 11% on Friday to close at $177.88. The rebound followed a six-month period in which Tesla shares had declined more than 40%. The stock’s 65% plunge in 2022 was its worst in Tesla’s 12-plus years as a public company.

Tesla’s rally this week was aided by an upbeat fourth-quarter earnings report. During the call with shareholders and analysts, CEO Elon Musk said the company was on target to potentially produce 2 million vehicles in 2023, and he suggested demand would support sales of those cars as well.

Official guidance called for production of 1.8 million vehicles this year. The company has not revised its longstanding target for 50% compound annual growth rate over a multi-year horizon.

Tesla’s five day performance charted against Rivian and Ford Motor Company.

Tesla beat on both the top and the bottom lines, recording total revenue of $24.32 billion, including $324 million of deferred revenue related to Tesla’s driver assistance systems. The company cut prices for its cars dramatically in December and January, leading to concern about demand and a buildup of inventory.

Analyst reaction to Tesla’s numbers was mixed.

“For bulls, the growth story is alive and well,” Bernstein’s Toni Sacconaghi, who has an underperform rating on the stock, wrote in a note on Thursday. “For bears, the numbers don’t lie.”

In early January, Tesla reported fourth-quarter vehicle deliveries and production that fell shy of expectations.

Tesla’s stock jump came amid a broader market rally. The S&P 500 was up 2.2% for the week and the Nasdaq gained 4.3%.

Other U.S.-based electric vehicle makers saw their shares climb higher. Rivian rose 22% during the week, while shares in legacy automakers Ford and General Motors each gained more than 7%.

Rival electric car manufacturer Lucid spiked on Friday as well, rising 43% on reports of rumors that Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, intended to take the company private.

Some of Tesla’s underperformance last year was attributed to Musk’s shift of focus to Twitter, which he acquired for $44 billion in October. Under Musk’s leadership, Twitter has experienced mass layoffs and fleeing advertisers, gutting morale.

Tesla remains the second most-shorted stock in U.S. markets, behind only Apple, meaning that a large numbers of investors are betting on a decline. Over 94 million of the automaker’s shares are shorted, according to data from S3 Partners.

Despite the rally, active short selling continues, S3 managing director Ihor Dusaniwsky told CNBC. Short sellers view Tesla’s appreciation as having created “an overheated and overbought stock that is due for at least a short-term reversal,” he said. In the last week, S3 Partners said it’s seen a 3.9% increase in total shares shorted, while investors shorting the stock lost $4.3 billion over that stretch.

WATCH: Tesla still in league of its own