Morgan Stanley Buys E*Trade in $13B Deal

According to the Wall Street Journal, the consolidation will give Morgan Stanley an inroad with E*Trade’s 5.2 million retail investors in what will be Wall Street’s largest deal since the 2008 financial crisis. The bank is targeting this market, though Morgan Stanley’s current $2.7 trillion in assets under management dwarfs E*Trade’s mere $360 billion.

Investment bank Morgan Stanley is buying digital stock brokerage E*Trade for $13 billion.

Despite lagging in assets, E*Trade’s client base is far larger than Morgan Stanley’s three million. But it’s also a different share of the investments landscape; while Morgan Stanley mostly appeals to high-dollar and institutional investors, E*Trade’s zero commission structure brings in more consumer-level, retail accounts.

It may also bring the wealth management giant closer to cryptocurrency markets. E*Trade reportedly toyed with launching a bitcoin (BTC) and ether (ETH) trading platform in April 2019. That service could now get wrapped into Morgan Stanley’s, though there’s no word yet on what that would look like.

This all-stock deal will grant E*Trade shareholders 1.0432 Morgan Stanley shares for each of theirs. It still needs shareholder approval.

Morgan Stanley’s move comes months after Charles Schwab acquired TD Ameritrade, which had its own interests in the crypto space, including investments in ErisX, a crypto derivatives platform.

Mt Gox Trustee Asked DOJ to Share Info on Jailed BTC-e Owner Alexander Vinnik

The trustee recovering funds on behalf of Mt Gox’s creditors has contacted the U.S. Department of Justice seeking information about Alexander Vinnik, who prosecutors allege played a role in laundering stolen funds from the bankrupt exchange.

Nobuaki Kobayashi, the trustee, requested details of the DOJ’s investigation into BTC-e, a defunct crypto exchange with the Russian roots, his office announced Tuesday. Vinnik, allegedly BTC-e’s operator, was arrested in the summer 2017 at the request of U.S. law enforcement and is now imprisoned in Greece.

Kobayashi contacted the DOJ after it brought a $100 million civil lawsuit against Vinnik this summer alleging he operated an unregistered money service business and failed to prevent money laundering.

“The Rehabilitation Trustee has contacted the U.S. Department of Justice through a U.S. law firm, and seeking further information”, the trustee’s office said in a statement.

The DOJ hadn’t responded to CoinDesk’s request for comment at press time.

‘Russian recovery’ pending

Mt. Gox’s creditors have become increasingly interested in BTC-e in recent months.

ZP Legal, a Russian law firm, claims it can recover up to 200,000 BTC from unnamed Russian nationals related to BTC-e and that it has already located some of the missing coins. Still, the creditors are hardly unified in wanting to work with ZP Legal, which wants a cut of the recovered BTC in return for its services. Kobayashi has yet to say if he wants to work with ZP on the “Russian recovery.”

During a public meeting with the creditors Tuesday, the trustee remained non-committal, noting only that his team was contacted by ZP Legal and had requested further information about its offer. ZP’s head Alexander Zheleznikov declined to comment for this article.

The meeting did reveal that two large claimants for Mt. Gox’s remaining funds – Mt. Gox’s parent company Tibanne Co. (led by the exchange’s former CEO Mark Karpeles) and Mt. Gox’s unsuccessful U.S. partner, CoinLab – have litigated claims previously denied by the trustee.

Tibanne asked for 82,507.7 BTC and $3.5 million (386 million Japanese yen) while CoinLab requested $15.7 billion (1,690 billion Japanese yen). The trustee approved the basis of the claims, but disputed the amounts demanded. The court hearing the case approved the trustee’s assessment, and Tibanne has filed an appeal in the higher court, according to the trustee.

Kobayashi’s team has burned through about $1.5 million (155 million Japanese yen) over the last six months and has now recovered a total of $644 million (69.4 billion Japanese yen) in previously lost funds. The creditors are due to meet the trustee again in March 2020.

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