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FCA Announces Second Cohort for AI Live Testing

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FCA Announces Second Cohort for AI Live Testing

WHY THIS MATTERS: The FCA’s second cohort announcement for AI Live Testing signals a crucial pivot point for the UK’s financial services sector. This initiative moves beyond theoretical discussions of artificial intelligence and into the practical, governed integration of complex models—such as agentic AI and neurosymbolic AI—into core banking functions. With major institutions like Barclays, Experian, and UBS participating, the industry is tacitly acknowledging that the commercial use of next-generation AI is imminent, but must be paired with stringent AI assurance. This regulatory oversight, conducted in collaboration with specialist partners, provides a critical framework for safe deployment, ensuring that innovations in credit scoring, anti-money laundering, and targeted investment support do not compromise consumer safety or market integrity. For businesses, the program results will set a crucial benchmark for risk management and operational standards necessary to leverage AI for competitive advantage in a highly regulated landscape.

Speaking at UK FinTech Week, Jessica Rusu, chief data, information and intelligence officer at the FCA has confirmed the second group of firms selected to join AI Live Testing. 

Eight new firms, including Barclays, Experian, Lloyds Banking Group (Scottish Widows), and UBS, have been chosen by the Financial Conduct Authority (FCA) to live test AI applications to support safe and responsible deployment. 

The FCA is working with its technical partner Advai, a London-based specialist in automated AI assurance, to provide AI Live testing. This initiative helps successful applicants explore key questions around risk management and live monitoring to support the responsible deployment of AI for consumers and markets.  

Applications reflect the fast-evolving nature of the technology, with a diverse range of AI models underpinning use cases – from agentic AI and small language models to emerging solutions such as neurosymbolic AI. Firms in the second group are testing both customer-facing and business‑to‑business use cases, including AI-enabled targeted support for investments, credit score insights for consumers, agentic payments, anti-money laundering detection, and Know Your Customer. 

“We’re continuing to collaborate with firms to support the safe and responsible development of AI in UK financial markets,” said Jessica Rusu, chief data, information and intelligence officer at the FCA.

“With tailored support from the FCA and Advai, the initiative reflects our commitment to supporting the pace of change in AI, whilst demonstrating how regulators and industry can work together to harness innovation responsibly.” 

The FCA will also publish a Good and Poor Practice report for AI in financial services later this year to support firms in the safe and responsible adoption of the developing technology. 

The announcement coincides with the publication of the FCA’s Innovation Insights Report, which highlights how FinTech innovation is evolving in the UK and what the regulator is learning from firms engaging with its innovation services. 

The report also shows that FinTech market activity closely matches demand for the FCA’s innovation services, particularly in fast-growing areas like AI. 

Applications for the AI Live Testing second cohort opened in January 2026, with firms beginning testing in April. Testing will conclude by the end of the year, with an evaluation report published in Q1 2027. 

FF NEWS TAKE: Absolutely, this moves the needle. The inclusion of use cases like agentic payments and neurosymbolic AI confirms that the UK is actively testing the most advanced AI technologies under real-world conditions. This structured approach to safe deployment should accelerate industry trust and adoption. The critical next step will be the FCA’s forthcoming Good and Poor Practice report, which will effectively serve as an early-stage blueprint for all financial institutions navigating the AI regulatory landscape globally.

New York Sues Coinbase And Gemini Over Alleged Illegal Prediction Market Gambling Operations

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New York Sues Coinbase And Gemini Over Alleged Illegal Prediction Market Gambling Operations

New York Attorney General Letitia James has filed lawsuits against Coinbase Financial Markets and Gemini Titan, alleging that both companies operate illegal gambling platforms through prediction markets available in New York.

The lawsuits claim that Coinbase and Gemini allow users to place bets on outcomes of events including sports games, entertainment awards, and elections. According to the complaint, these markets function as gambling under New York law because users risk money on uncertain outcomes outside their control.

Attorney General James stated that the platforms operate without licenses from the New York State Gaming Commission. The state requires licensing for gambling operations, including mobile sports betting. The lawsuits assert that Coinbase and Gemini have not obtained such approval while offering their products to users in New York.

The filings state that users aged 18 to 20 can access the platforms. New York law sets 21 as the minimum age for mobile sports betting. The Attorney General’s office argues that this access exposes younger users to financial risk and potential harm.

The complaints seek court orders requiring the companies to forfeit profits earned from the prediction markets. The state also seeks civil fines equal to three times those profits and restitution for affected users. The filings request restrictions on participation by users under 21 and limits on marketing practices that reach college campuses.

New York Attorney General: Prediction markets are gambling 

The lawsuits describe prediction markets as systems where users trade contracts tied to event outcomes. The Attorney General’s office argues that these contracts meet the legal definition of gambling because outcomes depend on chance or external events rather than user control.

The filings reference research from the National Institutes of Health that links early exposure to gambling with increased risk of anxiety, depression, and financial strain. The lawsuits also cite research from the American Psychological Association stating that a significant share of individuals with gambling disorders report suicidal ideation.

The complaints include allegations that the platforms allow betting on events involving New York college teams, which state law restricts.

Coinbase and Gemini launched prediction markets in mid-December and operate in all 50 states, according to court documents referenced in the filings. The Attorney General’s office states that the platforms present themselves as financial products while functioning as gambling systems.

The legal action forms part of a broader enforcement effort by New York authorities targeting online gambling and crypto-related platforms. The Attorney General’s office has previously taken action against video game companies and sweepstakes casino operators for alleged violations of state gambling laws.

The lawsuits also highlight ongoing regulatory disputes between state and federal authorities over prediction markets. The Commodity Futures Trading Commission has asserted federal jurisdiction over certain event-based contracts. Federal court cases have addressed whether state regulators can restrict such markets under gambling laws.

Mastercard joins BSSC to help advance end-to-end security across Blockchain ecosystems

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Mastercard joins BSSC to help advance end-to-end security across Blockchain ecosystems

Mastercard will contribute its global experience securing payments and digital infrastructure to support the Blockchain Security Standards Council (BSSC) as it works to strengthen trust, interoperability, and security across blockchain ecosystems.

Mastercard has joined the Blockchain Security Standards Council (BSSC) as a Charter-level member. The BSSC is a non-profit consortium focused on defining and maintaining rigorous security standards designed to support safe, reliable, and scalable blockchain and digital asset adoption.

“Part of my job is to make life difficult for criminals.” — Claire Le Gal, Senior Vice President, Integrity & Standards, Security Solutions for Mastercard and its representative on the BSSC board.Share

As a member of the council, Mastercard brings decades of deep experience across secure payments, identity verification, and trusted digital infrastructure to help advance industry-wide security best practices for blockchain-based and tokenized value exchange. The company will also collaborate through the BSSC to help shape security frameworks that protect consumers, financial institutions, and the broader financial system, while fostering trust and innovation that can operate at a global scale.

Mastercard joins a roster of leading blockchain innovators and digital asset pioneers, including Figment, Coinbase, Fireblocks, Anchorage Digital, Ribbit Capital, and BitGo, collaborating through the BSSC to promote consistent, high-integrity security standards across the ecosystem.

“Part of my job is to make life difficult for criminals,” said Claire Le Gal, Senior Vice President, Integrity & Standards, Security Solutions for Mastercard and its representative on the BSSC board. “As blockchain technology moves from experimentation toward scaled, real-world use cases, strong, shared security standards are essential. Joining the BSSC allows us to bring lessons from decades of securing global payment networks and to collaborate with peers to strengthen trust across blockchain systems.”

“We’re thrilled to welcome Mastercard as a member,” said Adam Rak, Executive Director for the BSSC. “Their experience securing complex, global payment networks will be invaluable as we work to provide rock-solid security guidelines for blockchain and digital asset ecosystems.”

Mastercard’s engagement with the BSSC will help deepen capabilities it has already brought to market, including the Multi‑Token Network and Crypto Credential—solutions designed to embed trust, security, and standardization into blockchain and digital asset infrastructure.

Mastercard also plans to actively participate in BSSC working groups on security and privacy, contributing both technical guidance and operational insights. The company’s cross-functional security team has expertise in fraud prevention, cyber resilience, disputes, and threat intelligence—all critical capabilities for shaping the council’s standards.

As blockchain adoption accelerates and financial use cases scale globally, Mastercard’s involvement with the BSSC reflects a proactive and collaborative approach to security, transparency, and trust in digital ecosystems—ensuring that new technologies are implemented safely and responsibly from the outset.

Feds sentence mob royalty Carmine Agnello for lining his pockets with tax dollars and crypto

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Feds sentence mob royalty Carmine Agnello for lining his pockets with tax dollars and crypto

Carmine Agnello, the mob boss John Gotti’s grandson, was sentenced to 15 months in prison for defrauding the U.S. government’s Covid relief funding system out of $1.1 million, proceeds which he used to invest in crypto, the Department of Justice said.

In a statement released Monday, the U.S. Attorney’s Eastern District of New York office said Agnello fraudulently obtained multiple disaster relief loans from the government’s Small Business Administration (SBA) and used the funds in cryptocurrency investments.

Gotti’s grandson “diverted [the proceeds] for his personal use, including by investing approximately $420,000 in a cryptocurrency business,” the attorney’s office said.

The fraudster, who will turn himself in for imprisonment on July 1, submitted false information to the SBA between April 2020 and November 2021, stating the proceeds were for his autoparts and recycling business in Queens, including for employee salaries.

“During the height of the COVID-19 pandemic, the defendant shamefully lined his own pockets with government and taxpayers’ dollars, which he must repay as part of today’s sentence,” United States Attorney Joseph Nocella said.

“Mr. Agnello defrauded a program designed to assist businesses and employees during the pandemic,” stated United States Postal Inspection Service, New York Division (USPIS) Inspector in Charge Larco-Ward.

Agnello is not the only individual to have defrauded the government’s Covid relief fund. Among several cases that ended up in court, Bruce Choi’s stands out as he illegally obtained $2 million in pandemic-eric business loans on behalf of non-existent companies and used the money to buy cryptocurrency via Kraken. David T. Hines fraudulently obtained $3.9 million from similar relief funds and used some of the proceeds to purchase a Lamborghini.

Based on statistics from the U.S. Government Accountability Office (GAO), fraud against Covid-related relief funds was rampant, with roughly $135 billion, or up to 15% of the total funds, lost to scams.

Agnello’s grandfather exerted power with brutal violence and enjoyed the spotlight. He took over the Gambino, running enterprises that authorities claimed earned him roughly $500 million a year from ventures that included extorting unions, illegal gambling, loan-sharking and stock fraud. In 1992, Gotti was found guilty on 13 criminal counts and sent to federal prison, where he died of cancer at age 61.

Core Scientific seeks $3.3 billion bond sale to further AI data center pivot

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Core Scientific seeks $3.3 billion bond sale to further AI data center pivot

Core Scientific (CORZ) is preparing to raise $3.3 billion through a junk bond sale as it continues its transition toward artificial intelligence-focused data center operations.

Demand for AI services has pushed data centers, power supply and advanced chips to their limits. To keep up, firms are tapping riskier parts of the debt market for funds to keep developing their operations. Core Scientific, once a bitcoin miner, sold $175 million in bitcoin last month to further its AI pivot.

Borrowers linked to AI infrastructure have raised $17.9 billion in junk bonds so far this year, Bloomberg reported. CORZ itself is building six data centers that will support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could bring in around $10 billion in revenue, the report adds, citing sources familiar with the deal.

Core Scientific’s move follows a string of large deals. Recent offerings tied to Google-backed data centers and CoreWeave raised a combined $6.7 billion. Another firm, Edged Compute, is marketing $1.3 billion in bonds to fund facilities leased to CoreWeave and an Alibaba unit.

Core Scientific said it will use proceeds to repay existing debt and fund reserves. It also plans to support construction across several states if costs exceed available funds, signaling how capital-intensive the AI buildout has become.

The company still holds “under 1,000 bitcoin,” according to CFO Jim Nygaard.

Big AI pivot

Core Scientific was founded in 2017 and grew into one of North America’s largest bitcoin miners before filing for Chapter 11 in December 2022, squeezed by high power costs and a weak bitcoin price. It emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ.

The pivot from bitcoin mining to AI hosting is all about the margins.

The April 2024 halving cut block rewards from 6.25 BTC to 3.125, and by late 2025, the average cash cost to mine one bitcoin rose while the price of BTC itself had been on a downturn, from over $125,000 to around $75,800. With rising power costs and competition, most miners became unprofitable and had to find alternative ways to continue earning revenue.

That’s when AI came to the rescue. Miners’ most valuable assets, already-built data centers and power contracts, meanwhile, gained a new use case: hosting computers that power AI.

Their power contracts, grid connections and cooling-ready sites are attracting hyperscalers, including Microsoft, Google parent Alphabet and others, in the ongoing AI race. Core Scientific was one of the first miners to pivot on a large scale, which caught investors’ attention and sparked the AI push.

Core Scientific’s shares were up about 6% on Tuesday and are up nearly 42% this year, while bitcoin fell 11%.

SoundCloud on the Payments Paradigm Shift Driven by LLMs and AI

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SoundCloud on the Payments Paradigm Shift Driven by LLMs and AI

At MPE 2026, David Ricart, Principal Product Manager on the Payments team at SoundCloud, discussed the evolutionary leap facing the payments sector. Ricart explained that his team is responsible for the full, end-to-end payment flow, managing everything from users purchasing services on the platform to paying out earnings to music creators.

SoundCloud pointed out that the widespread adoption of LLM and AI-based tools is a paradigm change, creating a massive opportunity to 10x their productivity. However, capitalizing on this opportunity requires flexibility and SoundCloud has observed that top-tier merchants are choosing to take ownership of the most critical business components of their payment stack.

This strategy allows them to quickly test, validate, and adapt to the ever-changing payment landscape and according to Ricart, companies that stick with rigid partners or inflexible infrastructure that cannot support this aggressive development speed risk being left behind.

The central topic of the event was agentic commerce, which SoundCloud believes the industry is rightly acknowledging as a reality. This shift will usher in a new era where “bots are going to be buying from bots” and interacting through fund transfers. 

This changes the way companies view automated transactions; historically, a bot at the checkout was seen as a bad sign, but the industry must now prepare for good bots making good purchases. The critical challenge is developing the ability to distinguish a legitimate, programmatic agentic purchase from a bad bot attempting to abuse the platform.

While the industry is acknowledging that agentic commerce is going to happen, Ricart stressed that there is no gold standard yet, and current solutions are fragmented. There is a expectation that card payments, which constitute the majority of transactions today, will be the default method for agentic commerce. However, Ricart personally believes that crypto is a “perfect use case” for agents and bots to conduct and operate transactions.

Prediction markets are the new secret weapon for Coinbase (COIN) and Robinhood (HOOD) growth

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Prediction markets are the new secret weapon for Coinbase (COIN) and Robinhood (HOOD) growth

Prediction markets are gaining traction as a new growth area for Coinbase (COIN) and Robinhood (HOOD), as investors look beyond a weak first quarter for crypto trading and focus on future products, according to Cantor Fitzgerald analyst Ramsey El-Assal.

El-Assal said “investors are increasingly treating the quarterly print as backward-looking,” with attention shifting to “forward-looking demand trends and the product roadmap,” including newer offerings such as prediction markets.

Both companies are expected to report softer results for the first quarter of 2026 after a pullback in crypto prices and trading activity. Bitcoin BTC$76,277.20 and ether (ETH) fell about 23% and 29% in the quarter, weighing on volumes across exchanges. Trading activity also slowed as the quarter progressed, with Coinbase volumes declining from roughly $66 billion in January to $54 billion in March, based on third-party data.

Cantor estimates Coinbase’s consumer and institutional trading volumes at $35 billion and $167 billion, both below Wall Street expectations. The firm also projects exchange revenue below consensus. Still, El-Assal maintained an “overweight” rating on the stock and raised his price target to $250, citing improving sentiment and longer-term growth drivers.

Robinhood faces similar near-term pressure. The analyst expects a sequential decline in trading volumes due to softer market conditions, along with a hit to net interest revenue from lower rates. But the company’s business model offers some cushion. Higher volatility can lift trading margins, and Cantor expects stronger yields in equities and options to partly offset weaker activity.

At the same time, crypto revenue quality may come under pressure. El-Assal noted the platform’s “tiered pricing structure … earns lower yields on large active traders … and higher yields on marginal traders,” with the latter group pulling back during volatility.

Despite these headwinds, both stocks have rallied in recent weeks. Coinbase shares are up about 18% quarter-to-date, while Robinhood has climbed roughly 40% in April from late-March lows, helped by improving risk sentiment and easing geopolitical tensions.

The focus now is on what comes next. For Coinbase, investors are watching regulatory developments and new business lines. The company’s prediction markets offering, launched this year, “continues to attract meaningful interest,” El-Assal said.

Robinhood is also leaning into prediction markets alongside other initiatives such as tokenization and private market access. The analyst said these efforts, along with regulatory changes like updates to pattern day trading rules, could help drive future growth.

Cantor maintained an “overweight” rating on Robinhood and raised its price target to $110.

The broader view, according to El-Assal, is that while current trading trends remain tied to crypto price cycles, the next phase of growth will depend more on product expansion and new use cases.

Later on Tuesday, the New York Attorney General’s office filed a lawsuit against Coinbase and fellow crypto exchange Gemini over their prediction market offerings, alleging that the products were actually gambling products and therefore in violation of state regulations.

Whether prediction markets — specifically, sports-related prediction markets — are gambling products are not is currently a topic of debate in both state and federal courts. The Commodity Futures Trading Commission has argued that prediction markets are swaps, and therefore properly regulated by that agency at the federal level. States have argued that at least the sports-related contracts are not swaps, and should be licensed and overseen by state regulators. This question is likely to end up before the U.S. Supreme Court.

New York sues Coinbase, Gemini over prediction market offerings

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New York sues Coinbase, Gemini over prediction market offerings

New York sued Coinbase and Gemini on Tuesday, becoming the latest state to argue that prediction market contracts dealing with sports, entertainment and elections are violating state gambling laws.

According to the lawsuits, Coinbase and Gemini’s prediction market offerings are really unlicensed gambling products, pointing to how the companies advertised their prediction markets and their role as bookmakers on the platforms. The NYAG’s office also described the actual behavior of the prediction market platforms, describing users as “bettors” and saying that “each contract is a bet.” The suits also argued that the platforms allow people to place bets between the ages of 18 and 21, when New York bars anyone under 21 from gambling on mobile apps.

“As described above, what Respondent offers through its platform is quintessentially gambling: It allows a bettor to stake or risk money upon the outcome of a contest of chance or a future contingent event not under the bettor’s control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome,” the suit against Coinbase said.

New York is just the latest state to sue prediction market providers over their sports and entertainment products. Nevada, Washington and a host of other states have similarly filed suit, arguing that at least the sports-related bets are, indeed, bets, and not federally regulated swaps. It’s an issue that now sits before multiple appeals courts, and is likely to wind up before the U.S. Supreme Court.

Coinbase Chief Legal Officer Paul Grewal said in a post on X (formerly Twitter) that “prediction markets are federally regulated national exchanges” and that Coinbase would fight for federal oversight.

A spokesperson for Gemini said the company did not have a comment.

Commodity Futures Trading Commission Chairman Mike Selig, for his part, has argued that prediction markets — including the sports-related contracts — fall under his agency’s “exclusive jurisdiction.” The CFTC has filed suit against Arizona, Connecticut and Illinois to block them from bringing charges against prediction market providers, and it filed to join another case out of Nevada to defend the prediction market providers.

Kalshi, one of the biggest prediction market providers, was not named as a defendant on Tuesday. The company preemptively sued the New York State Gaming Commission last fall, asking a federal court to rule that state gambling laws do not apply to its platform. That case is still working its way through the Southern District of New York courthouse.

In a statement, New York State Attorney General Letitia James said both Gemini and Coinbase’s products were “illegal gambling operations.”

“Gambling by another name is still gambling, and it is not exempt from regulation under our state laws and Constitution,” she said.

UPDATE (April 21, 2026, 22:55 UTC): Adds Gemini declining to comment.

Ripple targets post-quantum readiness for XRP Ledger by 2028

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Ripple targets post-quantum readiness for XRP Ledger by 2028

Ripple has laid out a multi-phase roadmap to prepare the XRP Ledger for a post-quantum future by 2028.

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Recent research from Google Quantum AI shows that the cryptography most blockchains rely on today can be broken by sufficiently advanced quantum computers, including the algorithms that secure wallets, sign transactions, and protect digital assets.

Ripple says that the findings make it clear that it needs to prepare for the quantum threat with a plan that treats the required migration as an “architectural challenge touching performance, storage, usability, cryptography, and protocol design”.

The roadmap is made up of four phases, beginning with post-quantum recovery if classical cryptography breaks, to enable safe recovery for account owners. Phase two is proactive planning and experimentation to assess the full impact of post-quantum cryptography on XRPL, while phase three will explore post-quantum primitives.

Finally, in 2028 Ripple is targeting a move from experimentation to execution with the entire XRPL ecosystem. Says the firm: “We’ll design, build and propose a new amendment to the XRPL ecosystem for native post-quantum cryptography and begin transitioning the network to PQC-based signatures at scale.”

Filmmakers chase crypto’s biggest mystery

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Filmmakers chase crypto’s biggest mystery

The big picture: The film Finding Satoshi aims to solve what its creators call one of the biggest financial mysteries ever.

  • Director Tucker Tooley said the project blends investigative reporting with storytelling about “a human being” behind Bitcoin.
  • The team deliberately avoided conspiracy tropes, instead focusing on Satoshi’s motivations, struggles, and context.
  • The mystery itself, why someone created Bitcoin and vanished, drives the narrative.

How they investigated: The team shifted tactics after early resistance from crypto insiders.

  • Investigative journalist Bill Cohan said major crypto figures often dismissed the question as irrelevant or a “waste of time.”
  • That resistance pushed the team to bring in private investigator Tyler Maroney and dig deeper.
  • They narrowed suspects to a small group of cryptographers with specific technical skills and early involvement in Bitcoin’s origins.

Behind the scenes: The reporting relied on years of relationship-building and technical analysis.

  • Maroney said the team focused on cryptographers, mathematicians, and early “cypherpunks,” not investors or executives.
  • Sources included pioneers like Whitfield Diffie, who helped invent public-key cryptography and industry veterans such as Joseph Lubin and Katie Haun.

Why it matters: The film reframes Bitcoin’s origin story and challenges how people think about it today.

  • Maroney said Bitcoin began as a privacy tool, not a store of wealth, rooted in fears of “surveillance capitalism.”
  • The creators argue understanding that context is key to understanding Bitcoin’s purpose.
  • The mystery also raises stakes: Satoshi is believed to hold about 1.1 million Bitcoin that have never moved.

What’s driving the mystery: Not everyone wants the answer.

  • Cohan said some major investors may prefer the myth to remain intact, fearing reputational risk if Satoshi were controversial.
  • Others argue it simply doesn’t matter, comparing it to not knowing who invented the internet.
  • The filmmakers reject that view, saying the identity and intent behind Bitcoin are central to its story.

What comes next: The film promises a definitive conclusion and a broader takeaway.

  • The team says it reached a clear answer, though they won’t reveal it outside the documentary.
  • They emphasize the journey: understanding the people and ideas that led to Bitcoin’s creation.
  • Tooley said the goal is to make a complex, technical subject accessible and entertaining for a broad audience.
  • The documentary comes out April 22, 2026 at findingsatoshi.com
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